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CUSTOMS MODERNIZATION AND TARIFF

ACT This is a very new law and there is no available
R.A. NO. 10863 textbook that which has an in depth discussion
about it. There is one available though, the
OUTLINE author is Abelardo T. Domondon. But the book
is mainly codal provisions and with a few notes
1. Customs Modernization and Tariff Act (RA which say what provision was amended or
10863) repealed.
2. Function of the Bureau of Customs
3. Customs Duties Now, around 80% of TCCP, more or less, was
a. Definition re-enacted in the new law with a few
i. Tariff modifications. So essentially, most principles
ii. Customs Duties and jurisprudence in customs law are still
b. Kinds applicable in the advent of the CMTA.
i. Regular
1. Ad valorem In fact, the repealing and saving clauses of
2. Specific CMTA would reveal that there are some
3. Mixed or compound provisions in the TCCP and its rules and
ii. Special regulations not inconsistent with the CMTA
1. Anti-dumping remain to be valid.
2. Countervailing
3. Marking Q: Do we need to compare the TCCP and
4. Discrimnatory CMTA each time?
c. Flexible Tariff Clause A: I don’t think so, because again, most of the
i. Sec. 28 (2), Art. VI, 1987 provisions in TCCP are re-enacted in the CMTA.
Consti There are only minor changes which are
ii. Codal introduced.
iii. Southerncross Cement v.
Cement Manufacturers GR BUREAU OF CUSTOMS
158540, 3 Aug 2005
4. Import Procedures Q: What government agency is tasked to
a. When does CMTA apply enforce and implement customs law?
i. Importation (CODAL) A: It’s the Bureau of Customs (BOC).
1. When does
importation begin The BOC is headed by a Commissioner. He
2. When does shall be assisted by at least 4 but not more than
importation end 6 deputy commissioners (Sec. 200, CMTA).
Feeder International Unlike before, under the TCCP, there are only 4
v. CA GR 94262, 31 deputy commissioners. Both the Commissioner
May 1991 and the deputies are presidential appointees.
ii. Exportation Also, there is a requirement that majority of the
Deputy Commissioners should come from the
b. Jurisdiction of Collector ranks of BOC (Sec. 200, CMTA).
c. Clearance procedure
i. Entry and Declaration Power and Functions of the BOC
ii. Period for entry
The power and functions of the BOC is found in
Sec. 202 of CMTA:
CUSTOMS MODERNIZATION AND TARIFF
ACT (CMTA) Section 202. Functions of the Bureau.— The
RA NO 10863 Bureau shall exercise the following duties and
functions:
CMTA is the new tariffs and customs law now. It
was approved on 30 May 2016. Previously it (a) Assessment and collection of customs
was PD 1464 as amended and it was called revenues from imported goods and other dues,
Tariff and Customs Code in the Philippines. fees, charges, fines and penalties accruing

under this Act;
(b) Simplification and harmonization of customs
procedures to facilitate movement of goods in
international trade;
(c) Border control to prevent entry of smuggled
goods;
(d) Prevention and suppression of smuggling
and other customs fraud;
(e) Facilitation and security of international trade
and commerce through an informed compliance
program;
(f) Supervision and control over the entrance
and clearance of vessels and aircraft engaged in
foreign commerce;
(g) Supervision and control over the handling of
foreign mails arriving in the Philippines for the
purpose of collecting revenues and preventing
the entry of contraband;
(h) Supervision and control on all import and
export cargoes, landed or stored in piers,
airports, terminal facilities, including container
yards and freight stations for the protection of
government revenue and prevention of entry of
contraband;
(i) Conduct a compensation study with the end
view of developing and recommending to the
President a competitive compensation and
remuneration system to attract and retain highly
qualified personnel, while ensuring that the
Bureau remains financially sound and
sustainable;
(j) Exercise of exclusive original jurisdiction over
forfeiture cases under this Act; and
(k) Enforcement of this Act and all other laws,
rules and regulations related to customs
administration.
So basically, the enforcement of the CMTA and
other laws, rules and regulations related to
customs administration is lodged with the BOC –
from assessment and collection of taxes,
penalties, fines, and charges, to facilitation and
control of international trade, imports and
exports, ports and boarders, compensation
study for its personnel, and of course, exclusive
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original jurisdiction over forfeiture cases under
this act.
Power and Functions of COC
The important official in the BOC is the COC. He
is the highest official in the BOC and practically
wields all the powers attached to the office. The
powers and functions of the COC are found in
Sec. 201 and Sec. 204.
To summarize, the COC has:
1. The power to interpret the provisions of
the CTMA;
2. The power to enforce the CTMA and
related laws, rules and regulations;
3. Power to review the action and decision
of customs officers including disputed
assessments subject to review by the
SOF and exclusive appellate jurisdiction
of the CTA;
4. Delegate powers;
5. Assign or reassign customs officers;
and,
6. Promulgate rules and regulations
subject to the approval of the SOF.
Section 201. Powers and Functions of the
Commissioner.— The Commissioner shall have
the following powers and functions:
(a) Exclusive and original jurisdiction to interpret
the provisions of this Act, in collaboration with
other relevant government agencies, subject to
review by the Secretary of Finance;
(b) Exercise any customs power, duties and
functions, directly or indirectly;
(c) Review any action or decision of any
customs officer performed pursuant to the
provisions of this Act;
(d) Review and decide disputed assessments
and other matters related thereto, subject to
review by the Secretary of Finance and
exclusive appellate jurisdiction of the Court of
Tax Appeals (CTA);
(e) Delegate the powers vested under this Act to
any customs officer with the rank equivalent to
division chief or higher, except for the following
powers and functions:
(1) Promulgation of rules and
regulations;

(2) Issuance, revocation or modification
of rulings; and
(3) Compromise or abate of customs
obligations.
(f) Assignment or reassignment of any customs
officer subject to the approval of the Secretary of
Finance; Provided, That District Collectors and
other customs officers that perform assessment
functions shall not remain in the same area of
assignment for more than three (8) years; and
(g) Perform all other duties and functions as may
be necessary for the effective implementation of
this Act and other customs related laws.
Section 204. Promulgation of Rules and
Regulations.— The Commissioner, subject to
the approval of the Secretary of Finance, shall
promulgate rules and regulations for the
enforcement of this Act. The Commissioner shall
regularly prepare and publish an updated
customs manual, and the rules, regulations and
decisions of the Bureau. The Commissioner
shall furnish the Congress of the Philippines, the
NEDA and the Tariff Commission with electronic
copies of department orders, administrative
orders, circulars, and rules and regulations
promulgated pursuant to this Act.
CUSTOMS DISTRICTS AND PORTS OF
ENTRY
For facilitation and efficiency of implementing
customs law, the Philippines is divided into
Customs Districts Each district shall be
supervised by 1 District Collector. He will be
assisted by deputy district collectors (Sec. 206,
CMTA). The Customs Districts shall supervise
and control ports of entry under its jurisdiction
(Sec. 207, CMTA).
Q: What is a port of entry?
A: Port of Entry refers to a domestic port open to
both domestic and international trade, including
principal ports of entry and subports of entry. A
principal port of entry is the chief port of entry of
the Customs District wherein it is situated and is
the permanent station of the District Collector of
such port. Subports of entry are under the
administrative jurisdiction of the District Collector
of the principal port of entry of the Customs
District. Port of entry as used in this Act shall
include airport of entry (Sec. 102, (hh), CMTA).
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There are essentially two types of ports of entry:
1. Principal ports of entry; and,
2. Subports of entry.
Principal ports of entry are listed in Sec. 207 of
CMTA. They are as follows:
1. Aparri,
2. San Fernando,
3. Manila, Manila International Container
Port,
4. Ninoy Aquino
5. International Airport,
6. Subic, Clark,
7. Batangas,
8. Legaspi,
9. Iloilo,
10. Cebu,
11. Tacloban,
12. Surigao, Cagayan de Oro,
13. Zamboanga,
14. Davao,
15. Limay, and,
16. Such other ports that may be created
pursuant to this Act
The District Collector is assigned at principal
ports. The deputies may be assigned to other
types of ports of entry.
Section 207. Ports of Entry.— All ports of entry
shall be under the supervision and control of a
Customs District. A District Collector shall be
assigned in the principal ports of entry while a
Deputy District Collector may be assigned to
other types of ports of entry.
The principal ports of entry shall he located in
Aparri, San Fernando, Manila, Manila
International Container Port, Ninoy Aquino
International Airport, Subic, Clark, Batangas,
Legaspi, Iloilo, Cebu, Tacloban, Surigao,
Cagayan de Oro, Zamboanga, Davao, Limay
and such other ports that may be created
pursuant to this Act.
For the effective enforcement of the Bureau's
functions and without hampering business and
commercial operations of the ports, sea ports
and airport authorities and private ports and
airport operators shall provide suitable areas for
examination, and for other customs equipment
free of charge within a definite period of time, as
agreed with private port and airport operations, if
any.

Duties of the District Collector
Q: What are the duties of the District Collector?
A: Sec. 210:
Section 210. Duties of the District Collector.—
The District Collector shall have the following
duties in their assigned Customs District:
(1) Ensure entry of all imported goods at the
customs office;
(2) Prevent importation and exportation of
prohibited goods;
(3) Ensure legal compliance of regulated goods
and facilitate the flow of legitimate trade;
(4) Examine, classify and value imported goods;
(5) Assess and collect duties, taxes and other
charges on imported goods;
(6) Hold and dispose imported goods in
accordance with this Act;
(7) Prevent smuggling and other customs fraud;
and
(8) Perform other necessary duties that may be
assigned by the Commissioner for the effective
implementation of this Act. Subject to the
supervision and control of the District Collector,
the duties and functions of the District Collector
may be delegated to the Deputy District
Collector. The Deputy District Collector assigned
to a sub-port shall be under the supervision and
control of the District Collector of the
corresponding principal port.
In essence, the district collector has supervision
and control over the ports of entry within his
jurisdiction. He has the power to enforce all
customs laws, rules, and regulations within the
scope of his territorial jurisdiction.
He has the duty to ensure entry of all imported
goods, examine, classify, value imported goods,
and assess and collect taxes due on importation
and exportation.
So basically, he is like the mini COC. Only that,
his territorial coverage is limited. Of course, he
has to make regular reports to the
Commissioner which includes any probable or
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initiated litigation within the customs district and
all other district transactions (Sec. 213, CMTA).
WHEN DO CMTA AND OTHER CUSTOMS
LAW APPLY
We have to know when should the CMTA and
other customs laws apply because this will have
an impact on the jurisdiction of the BOC and
other law enforcement agencies tasked by law
to enforce customs law. So the first thing that we
have to ask is “when do the CMTA and other
customs law apply?”
The general answer is that CMTA and other
customs laws apply only when there is
importation or exportation. Without these two,
there is no CMTA or customs law to talk about.
Q: What is importation?
A: Importation refers to the act of bringing in of
goods from a foreign territory into Philippine
territory, whether for consumption, warehousing,
or admission as defined in this Act (Sec. 102 (z),
CMTA).
Q: What about exportation?
A: Exportation refers to the act, documentation,
and process of bringing goods out of Philippine
territory (Section 102 (s), CMTA).
When Importation Begins and Ends
It is not enough for us to define importation. It’s
simple to understand. Goods are from abroad.
We want to transport them here in RP. That’s
basically importation.
But if you notice, there is a time frame for
importation of goods. The goods are from
abroad, then they will be in transit, and then the
vessel or the plane enters the Philippine territory
and then docks or lands at a Philippine port.
Then the goods are taken out whether
permanently or temporary.
Under the given scenario, when will the BOC
start to have jurisdiction over the goods? If the
goods are already in the Philippines and
unloaded, does that mean the BOC loses
jurisdiction over such goods? Now, we need to
further define the concept of importation
because, again, it has something to do with the
jurisdiction of the BOC over the imported goods.
Q: When does importation begin?

A: Section 103:
Section 103. When Importation Begins and
Deemed Terminated.— Importation begins when
the carrying vessel or aircraft enters the
Philippine territory with the intention to unload
therein.
Feeder International Line v. CA
GR 94262, 31 May 1991
Facts:
There is a foreign vessel (Honduras) operated
and owned by Feeder International Shipping
Lines carrying gas oil and fuel oil. Then the
vessel anchored somewhere in Iloilo without
informing the customs authorities. Their
anchoring only came to the knowledge of the
authorities because of a civilian informant.
This was investigated by the customs and then
the customs team found out that the vessel did
not have on board the required ship and
shipping documents except for a clearance from
the Singapore port authorities clearing the
vessel for Zamboanga. Because of which, the
vessel and its cargo were held and a warrant of
seizure and detention over the same was
issued. Thereafter, the forfeiture proceedings
ensued and the collector of customs found
Feeder International guilty of illegal importation
and ordered the forfeiture of the vessel including
its cargo.
This was appealed and all through out, Feeder
lost. Then this case came to the SC.
Issue:
Whether or not there is illegal importation. To
determine whether or not there is illegal
importation, we must first determine whether or
not there is importation to begin with.
According to Feeder, there is no importation to
begin with because Feeder did not even unload
its cargo. In fact, the vessel merely anchored
somewhere and that’s it.
Held:
The SC said still, there is illegal importation.
Importation begins when the vessel or aircraft
enters the Philippine jurisdiction with the
intention to unload therein. Actual unloading is
not a requirement because mere intent is
enough.
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In this case, this intent is established. Violation
of customs law is considered as indicative of the
intent which constitutes the commencement of
importation. In this case, there were no shipping
documents for the cargo. Also, the vessel did
not even notify Iloilo port or the Customs
authorities.
Q: When does importation end?
A: Sec. 103 further says:
Sec. 103. xxx xxx Importation is deemed
terminated when:
(a) The duties, taxes and other charges due
upon the goods have been paid or secured to be
paid at the port of entry unless the goods are
free from duties, taxes and other charges and
legal permit for withdrawal has been granted; or
(b) In case the goods are deemed free of duties,
taxes and other charges, the goods have legally
left the jurisdiction of the Bureau.
There are two scenarios here:
1. If the goods imported are subject to
duties and taxes; and,
2. If the goods imported are free of duties
and taxes.
If the goods imported are subject to duties and
taxes, the importation is deemed to be
terminated when:
1. The duties and other charges have been
paid or secured to be paid at the port of
entry; AND,
2. The legal permit for withdrawal has
been granted.
If the goods are free of duties and taxes,
importation is deemed terminated when the
goods have legally left the jurisdiction of the
Bureau.
Secretary of Finance v. Oro Maura Shipping
Lines
GR No. 156946, 16 Jul 2009
Facts:
The subject of importation here is a ship – a
vessel – MV Haruna. The DOF allowed
temporary registration of the ship and its tax and
duty-free release to Glory Shipping lines. Then
The BOC required Glory Shipping to post a bond
equal to 150% of the duties and taxes. Glory
Shipping posted the bond.

Eventually, MV Haruna arrived at Mactan Port
was duly entered thereat.
Now, Glory Shipping’s bond expired. It also did
not comply with its letter of guaranty. It also did
not pay the duties and taxes due on the vessel
despite repeated demands by the port of
Mactan.
In the meantime, Glory shipping sold Haruna to
Oro Maura Shipping without notifying the
Collector.
Now, this same boat was then again entered in
the port of Manila and the duties and taxes
assessed by Manila Port have been paid.
When Mactan Port Collector discovered this, it
sent a demand letter against Oro Maura for
unpaid customs duties. Then an order of
forfeiture was issued by Mactan Port Collector.
In other words, there was an unpaid assessment
in Cebu for the vessel, but there was a paid
assessment in Manila for the same vessel.
In this case, the government lost from the CTA
to the CA. Then the government appealed to the
court.
Issue:
Was the importation of MV Haruna terminated?
Held:
The SC said, the importation has not been
terminated.
For termination, it is required that the duties and
other charges have been paid and the legal
permit for withdrawal has been granted. The
payment must have to be payment in full in
order for an importation to be deemed
terminated. For as long as the importation has
not been completed, the imported item remains
under the jurisdiction of the BOC.
In this case, there was an original but
incomplete importation by Glory Shipping Lines.
In this case, the duties and taxes for the
importation in Mactan have not been paid. This
is even if there was already payment made in
Manila for the assessment made by the Manila
Port Collector. The importation that was
originally started with Glory Shipping was never
completed and terminated that the present
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importation is merely a continuation of that
original process.
EXERCISE OF POLICE AUTHORITY
Q: Who are the persons or what are the offices
which may exercise police authority for the
enforcement of CTMA?
A: You have Sec. 214.
Section 214. Persons Exercising Police
Authority.— For the effective implementation of
this Act, the following persons are authorized to
effect search, seizure, and arrest:
(a) Officials of the Bureau, District Collectors,
Deputy District Collectors, police officers,
agents, inspectors and guards of the Bureau;
(b) Upon authorization of the Commissioner,
officers and members of the Armed Forces of
the Philippines (AFP) and national law
enforcement agencies; and
(c) Officials of the BIR on all cases falling within
the regular performance of their duties, when
payment of internal revenue taxes is involved.
All officers authorized by the Commissioner to
exercise police authority shall at all times
coordinate with the Commissioner.
Goods seized by deputized officers pursuant to
this section shall be physically turned-over
immediately to the Bureau, unless provided
under existing laws, rules and regulations.
For this purpose, mission orders shall clearly
indicate the specific name carrying out the
mission and the tasks to be carried out.
Subject to the approval of the Secretary of
Finance, the Commissioner shall define the
scope, areas covered, procedures and
conditions governing the exercise of such police
authority including custody and responsibility for
the seized goods. The rules and regulations to
this effect shall be furnished to the concerned
government agencies and personnel for
guidance and compliance.
All seizures pursuant to this section must be
effected in accordance with the provisions on
the conduct of seizure proceedings provided for
in Chapters 3 and 4 of Title XI of this Act.

Q: Where can such authority be exercised?
A: Section 215.
Section 215. Place Where Authority May be
Exercised.— All persons exercising police
authority as described in the preceding section
shall, only exercise powers within customs
premises as provided for in Section 303 of this
Act, and within the limits of the authority granted
by the Commissioner, Port and airport
authorities in all ports of entry shall provide
authorized customs officers with unhampered
access to all premises within their administrative
jurisdiction.
You have to read this in conjuction with Sec.
303.
Section 303. Control Over Premises Used for
Customs Purposes.— The Bureau shall, for
customs purposes, have exclusive control,
direction and management of customs offices,
facilities, warehouses, ports, airports, wharves,
infrastructure and other premises in the
Customs Districts, in all cases without prejudice
to the general police powers of the local
government units (LGUs), the Philippine Coast
Guard and of law enforcement agencies in the
exercise of their respective functions.
Then you have the power of seizure of the
persons exercising police authority under CMTA.
Section 216, Exercise of Power of Seizure.—
Any person exercising police authority under this
Act has the power and duty to seize any vessel,
aircraft, cargo, goods, animal or any other
movable property when the same is subject to
forfeiture or when they are subject of a fine
imposed under this Act.
Q: What about the authority to enter premises?
If you remember your constitutional law, one of
the exceptions in warrantless searches is
searches by customs authority.
A: That exception is found in Section 219 and
220 of the CMTA.
Section 219. Authority to Enter Properties.—
Any person exercising police authority may, at
any time, enter, pass through, and search any
land, enclosure, warehouse, store, building or
structure not principally used as a dwelling
house.
When a security personnel or any other
employee lives in the warehouse, store, or any
building, structure or enclosure that is used for
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storage of goods, it shall not be considered as a
dwelling house for purposes of this Act.
Under Section 219, any person exercising police
authority may, at any time, enter, pass through,
and search any land, enclosure, warehouse,
store, building or structure. The main condition is
that the building is not principally used as a
dwelling house.
Q: What if there is a security personnel or
employee living in the said building?
A: It doesn’t matter. It shall not be considered as
a dwelling house for purposes of this act.
Comparing this with the TCCP, the CMTA
removed the term “and his family”. In the TCCP,
the provision says something like this – a
building used for storage does not become a
dwelling house because a person employed as
watchman or his family stays in the premises.
Q: Does this mean that if the family is already
living in the building, the place can now be
considered as a dwelling house?
For dwelling houses, the rule is different:
Section 220. Authority to Search Dwelling
House.— A dwelling house may be entered and
searched only upon warrant issued by a Judge
of a competent court, the sworn application
thereon showing probable cause and particularly
describing the place to be searched and the
goods to be seized.
For the search of dwelling house, it is mandatory
that there must be a search warrant issued by a
judge upon sworn application showing probable
cause and particularly describing the place to be
searched and goods to be seized. So, the
normal process for search warrant application
must be taken.
Apart from that, you also have Sec. 221 on
search of vessels, aircrafts, and persons, or
goods conveyed therein. You also have Sec.
222 on authority to search vehicles, other
carriers, persons, and animals. You also have
Section 223 pertaining to authority to search
persons arriving from foreign countries. And you
also have the power to inspect and visit – this
involves demand of evidence of payment of
duties and taxes on imported goods openly for
sale or kept in storage.

Section 224. Power to Inspect and Visit.— The
Commissioner or any customs officer who is
authorized in writing by the Commissioner, may
demand evidence of payment of duties and
taxes on imported goods openly for sale or kept
in storage. In the event that the interested party
fails to produce such evidence within fifteen (15)
days, the goods may be seized and subjected to
forfeiture proceedings: Provided, That during the
proceedings, the interested party shall be given
the opportunity to prove or show the source of
the goods and the payment of duties and taxes
thereon: Provided, Further, That when the
warrant of seizure has been issued but
subsequent documents presented evidencing
proper payment are found to be authentic and in
order, the District Collector shall, within fifteen
(15) days from the receipt of the motion to quash
or recall the warrant, cause the immediate
release of the goods seized, subject to
clearance by the Commissioner: Provided,
Finally, That the release thereof shall not be
contrary to law.
CUSTOMS JURISDICTION
Customs jurisdiction has something to do with
the territorial coverage of the Customs. It
includes the application of laws and pursuit of
goods subject to seizure.
Section 300. Customs Jurisdiction.— For the
effective implementation of this Act, the Bureau
shall exercise jurisdiction over all seas within
Philippine territory and all coasts, ports, airports,
harbors, bays, rivers and inland waters whether
navigable or not from the sea and any means of
conveyance.
The Bureau shall pursue imported goods subject
to seizure during its transport by land, water and
air and shall exercise jurisdiction as may be
necessary for the effective enforcement of this
Act. When a vessel or aircraft becomes subject
to seizure for violation of this Act, a pursuit of
such vessel or aircraft which began within the
territorial waters or air space may continue
beyond the same, and the vessel or aircraft may
be seized in the high seas or international air
space.
The jurisdiction of the BOC practically covers all
seas within the Philippine territory. It covers all
coasts, ports, and inland waters whether
navigable or not. It also includes any means of
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conveyance. It is not limited to ships or planes. It
also involves conveyance by land.
The BOC is given the authority to pursue
imported goods subject to seizure during its
transport by land, water or air. Such imported
goods are within the jurisdiction of the BOC.
Also incorporated in the section is the doctrine of
hot pursuit. When a vessel or aircraft becomes a
subject of seizure for violation of the CMTA, a
pursuit of such vessel or aircraft which began in
the territory of RP may continue even the pursuit
is already beyond the territory. The vessel or
aircraft may be seized in the high seas or
international air space.
CUSTOMS CONTROL
The jurisdiction of the BOC is not limited to
vessels. The jurisdiction is also over the goods.
This is affirmed by Sec. 301 of CMTA which
provides:
Section 301. Customs Control Over Goods.—
All goods, including means of transport, entering
or leaving the customs territory, regardless of
whether they are liable to duties and taxes, shall
be subject to customs control to ensure
compliance with this Act.
xxx xxx xxx
IMPORTATION
Let us start with importation. As mentioned
earlier, importation begins when the vessel or
aircraft enters RP territory with the intention to
unload therein.
Now, upon arriving at the port, the first thing that
will be done is entry. The goods imported will be
declared and entered through a customs office
at a port of entry. This is under Section 400.
Section 400. Goods to be Imported through
Customs Office.— All goods imported into the
Philippines shall be entered through a customs
office at a port of entry, or may be admitted to or
removed from a free zone as defined in this Act,
as the case may be.
Q: Which comes first, declaration or entry?
A: The declaration comes first. When the goods
arrives, the declarant declares the goods

imported and enters the declaration at the port
of entry.
Section 115. Treatment of Importation.—
Imported goods shall be deemed “entered” in
the Philippines for consumption when the goods
declaration is electronically lodged, together with
any required supporting documents, with the
pertinent customs office.
Types of Importation
Q: What are the different types of importation?
A: You have the following:
1. Free Importation (and Exportation)
Section 116. Free Importation and
Exportation.— Unless otherwise provided by law
or regulation, all goods may be freely imported
into and exported from the Philippines without
need for import and export permits, clearances
or licenses.
2. Regulated Importation (and Exportation)
Section 117. Regulated Importation and
Exportation.— Goods which are subject to
regulation shall be imported or exported only
after securing the necessary goods declaration
or export declaration, clearances, licenses, and
any other requirements, prior to importation or
exportation. In case of importation, submission
of requirements after arrival of the goods but
prior to release from customs custody shall be
allowed but only in cases provided for by
governing laws or regulations.
3. Prohibited Importation (and Exportation)
Section 118. Prohibited Importation and
Exportation.— The importation and exportation
of the following goods are prohibited:
(a) Written or printed goods in any form
containing any matter advocating or inciting
treason, rebellion, insurrection, sedition against
the government of the Philippines, or forcible
resistance to any law of the Philippines, or
written or printed goods containing any threat to
take the life of, or inflict bodily harm upon any
person in the Philippines;
(b) Goods, instruments, drugs and substances
designed, intended or adapted for producing
unlawful abortion, or any printed matter which
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advertises, describes or gives direct or indirect
information where, how or by whom unlawful
abortion is committed;
(c) Written or printed goods, negatives or
cinematographic films, photographs, engravings,
lithographs, objects, paintings, drawings or other
representation of an obscene or immoral
character;
(d) Any goods manufactured in whole or in part
of gold, silver or other precious metals or alloys
and the stamp, brand or mark does not Indicate
the actual fineness of quality of the metals or
alloys;
(e) Any adulterated or misbranded food or goods
for human consumption or any adulterated or
misbranded drug in violation of relevant laws
and regulations;
(f) Infringing goods as defined under the
Intellectual Property Code and related laws; and
(g) All other goods or parts thereof which
importation and exportation are explicitly
prohibited by law or rules and regulations issued
by the competent authority.
4. Restricted Importation (and Exportation)
Section 119. Restricted Importation, and
Exportation.— Except when authorized by law or
regulation, the importation and exportation of the
following restricted goods are prohibited:
(a) Dynamite, gunpowder, ammunitions and
other explosives, firearms and weapons of war,
or parts thereof;
(b) Roulette wheels, gambling outfits, loaded
dice, marked cards, machines, apparatus or
mechanical devices used in gambling or the
distribution of money, cigars, cigarettes or other
goods when such distribution is dependent on
chance, including jackpot and pinball machines
or similar contrivances, or parts thereof;
(c) Lottery and sweepstakes tickets, except
advertisements thereof and lists of drawings
therein;
(d) Marijuana, opium, poppies, coca leaves,
heroin or other narcotics or synthetic drugs
which are or may hereafter be declared habit
forming by the President of the Philippines, or
any compound, manufactured salt, derivative, or

preparation thereof, except when imported by
the government of the Philippines or any person
duly authorized by the Dangerous Drugs Board,
for medicinal purposes;
(e) Opium pipes or parts thereof, of whatever
material; and
(f) Any other goods whose importation and
exportation are restricted.
The restriction to import or export the above
stated goods shall include the restriction on their
transit.
Declaration
Q: Who makes the declaration?
A: The declarant. This is found in Section 106 of
CMTA:
Section 106. Declarant.— A declarant may be a
consignee or a person who has the right to
dispose of the goods. The declarant shall lodge
a goods declaration with the Bureau and may
be:
(a) The importer, being the holder of the bill of
lading; or
(b) The exporter, being the owner of the goods
to be shipped out; or
(c) A customs broker acting under the authority
of the importer or from a holder of the bill; or
(d) A person duly empowered to act as agent or
attorney-in-fact for each holder.
In case the consignee or the person who has the
right to dispose of the goods is a juridical
person, it may authorize a responsible officer of
the company to sign the goods declaration as
declarant on its behalf.
The goods declaration submitted to the Bureau
shall be processed by the declarant or by a
licensed customs broker; Provided, That for
importations, a transition period of two (2) years
from the effectivity of this Act is hereby provided
during which subparagraph (d) of this section
shall not be implemented by the Bureau:
Provided, Further, That after two (2) years from
the effectivity of this Act, subparagraph (d) of
this section shall take into effect consistent with
international standards and customs best
Page 10 of 39
practices.
Q: What are the rights and responsibility of the
declarant?
A: You have Sec. 107:
Section 107. Rights and Responsibilities of the
Declarant.— The declarant shall be responsible
for the accuracy of the goods declaration and for
the payment of all duties, taxes and other
charges due on the imported goods. The
licensed customs broker shall likewise be
responsible for the accuracy of the goods
declaration but shall not be responsible for the
payment of duties, taxes and other charges due
on the imported goods.
The declarant shall sign the goods declaration,
even when assisted by a licensed customs
broker, who shall likewise sign the goods
declaration.
Q: What are the goods that need to be
declared?
A: Under Sec. 401, unless otherwise provided in
CMTA, all imported goods shall be subject to the
lodgement of a goods declaration. A goods
declaration may be for consumption, for customs
bonded warehousing, for admission, for
conditional importation, or for customs transit.
The declarant declares the goods. After the
declaration comes the entry. The declarant then
enters the declaration either manually or
electronically. The entire process is what you
call as “entry”.
“Entry” refers to the act, documentation and
process of bringing imported goods into the
customs territory, including goods coming from
free zones (Sec. 101 (r), CMTA).
The act of filing the declaration before the BOC
is called “Lodgment.” “Lodgment refers to the
registration of goods declaration with the Bureau
(Sec. 102 (dd), CMTA)
Q: What are the types of entry?
A: There are two types of entry: (1) formal entry;
and (3) informal entry.
A formal entry is one filed by the customs
broker. If the entry is filed by the customs
examiner or appraiser, it is called an informal
entry.

Now, under Section 402, all goods declaration
for consumption shall be cleared through a
formal entry process except for the following
goods which shall be cleared through an
informal entry process:
a. Goods of commercial nature with FOB
or FCA at a value of less than
50,000.00; and,
b. Personal and household effects or
goods, not in commercial quantity,
imported in a passenger’s baggage or
mail.
Q: Now, there are some occasions that the
declarant has no sufficient knowledge of the
goods imported. What is the remedy?
A: It is possible that he will avail of provisional
goods declaration.
Section 403. Provisional Goods Declaration.—
Where the declarant does not have all the
information or supporting documents required to
complete the goods declaration, the lodging of a
provisional goods declaration may be allowed:
Provided, That it substantially contains the
necessary information required by the Bureau
and the declarant undertakes to complete the
information or submit the supporting documents
within forty-five (45) days from the filing of the
provisional goods declaration, which period may
be extended by the Bureau for another forty-five
(45) days for valid reasons.
If the Bureau accepts a provisional goods
declaration, the duty treatment of the goods
shall not be different from that of goods with
complete declaration.
Goods under a provisional goods declaration
may be released upon posting of any required
security equivalent to the amount ascertained to
be the applicable duties and taxes.
Q: Who is the deemed the owner of imported
goods?
A: Section 404.
Section 404. Owner of Imported Goods.— All
goods imported into the Philippines shall be
deemed to be the property of the consignee or
the holder of the bill of lading, airway bill or other
equivalent transport document if duly endorsed
by the consignee therein, or, if consigned to
order, duly endorsed by the consignor. The
underwriters of abandoned goods and the
Page 11 of 39
salvors of goods saved from wreck at sea,
coast, or in any area of the Philippines, may be
regarded as the consignees.
This is important because the importer is the
one liable for the duties, taxes, fees and charges
attached to importation. In fact, it is a personal
debt due and demandable against the importer
against the government. This is under Sec. 405:
Section 405. Liability of Importer for Duties and
Taxes.— Unless relieved by laws or regulations,
the liability for duties, taxes, fees, and other
charges attached to importation constitutes a
personal debt due and demandable against the
importer in favor of the government and shall be
discharged only upon payment of duties, taxes,
fees and other charges. It also constitutes alien
on the imported goods which may be enforced
while such goods are under customs' custody.
Q: When should the goods declaration be filed?
A: Sec. 407:
Section 407. Goods Declaration and Period of
Filing.— xxx xxx xxx
Goods declaration must be lodged within fifteen
(15) days from the date of discharge of the last
package from the vessel or aircraft. The period
to file the goods declaration may, upon request,
be extended on valid grounds for another fifteen
(15) days: Provided, That the request is made
before the expiration of the original period within
which to file the goods declaration: Provided,
However, That the period of the lodgement of
the goods declaration may be adjusted by the
Commissioner.
Q: What are the contents and the statements
that should be included in the goods
declaration?
A: You have Sec. 411 and Sec. 412:
Section 411. Contents of Goods Declaration.—
Goods declaration shall contain the names of
the consignee, importing vessel or aircraft, port
of departure, port of destination and date of
arrival, the number and marks of packages, or
the quantity, if in bulk, the nature and correct
commodity description of the goods contained
therein, its value as set forth in a proper invoice,
and such other information as may be required
by rules and regulations. Where the declarant
does not have all the information required to
make the goods declaration, a provisional or

incomplete goods declaration shall, for certain
cases and for reasons deemed valid by the
Bureau, be allowed to be lodged: Provided, That
it contains the particulars deemed necessary by
the Bureau for the acceptance of the entry filed
and that the declarant undertakes to complete it
within forty-five (45) days from the filing of the
provisional goods declaration in accordance with
Section 403 of this Act.
Section 412. Statements to be Provided in the
Goods Declaration.— No entry of imported
goods shall be allowed unless the goods
declaration has been lodged with the Bureau.
The goods declaration shall, under penalties of
falsification or perjury, contain the following
statements:
(a) The invoice and goods declaration contain
an accurate and faithful account of the prices
paid or payable for the goods, and other
adjustments to the price actually paid or
payable, and that nothing has been omitted
therefrom or concealed whereby the government
of the Republic of the Philippines might be
defrauded of any part of the duties and taxes
lawfully due on the goods; and
(b) To the best of the declarant's information and
belief, all the invoices and bills of lading or
airway bills relating to the goods are the only
ones in existence relating to the importation in
question, and that these documents are in the
same state as when they were received by the
declarant, and the declaration thereon are in all
respects genuine and true.
Goods declaration shall be submitted
electronically pursuant to Republic Act No. 8792,
otherwise known as the “Electronic Commerce
Act of 2000”. Such declarations when printed
and certified by a competent customs officer as
a faithful reproduction of the electronic
submission shall be considered as actionable
documents for purposes of prosecuting a
declarant if the declarations are found to be
fraudulent.
Examination of Goods
After the entry, there will be an examination of
goods. Priority in the examination is given to
perishable goods, live animals, and other goods
requiring immediate examination (Sec. 419,
CMTA).
Page 12 of 39
As a general rule the BOC may examine the
goods in the presence of declarant or his
authorized representative. However,
examination of the goods in the absence of the
declarant or his representative may be allowed
in exceptional circumstance. These
circumstances will be defined by the IRR (Sec.
419, CMTA).
If the declarant or his representative does not
appear, the BOC may require the declarant to
be present or be represented at the examination
of goods (Sec. 419, CMTA).
Q: What about taking samples? Is the BOC
allowed to do that?
A: Yes, the BOC is allowed but only when
needed to establish the description and value of
the goods declared or to ensure compliance.
The samples shall be as minimal as possible
(Sec. 419, CMTA).
By virtue of the amendment, the law now allows
nonintrusive examination of goods such as the
use of x-ray machines. As per international
standards, the examination shall be as
nonintrusive as possible (Section 420, CMTA).
However, this does not prevent the BOC from
employing physical examination when:
1. It is directed by the COC on account of
derogatory information;
2. The goods are subject to an Alert Order;
3. The goods are electronically selected for
physical exam;
4. There are issues and controversies
surrounding the goods declaration and
import clearance process; or,
5. The importer or declarant requests for
examination of goods (Sec. 420,
CMTA).
Assessment
After examination is the assessment.
Assessment is the process of determining the
amount of duties and taxes and other charges
due on imported and exported goods (Sec. 102
(e), CMTA).
Q: Who has the task of making such
assessment?

A: Initially, it is lodged with the customs officer.
He shall classify, value, and determine the
duties and taxes to be paid.
Q: Can the importer dispute such assessment?
A: Yes, the importer may do so. But this does
not prevent the customs officer in proceeding
with the assessment anyway. You call this as
“tentative assessment”.
Section 425. Tentative Assessment of Goods
Subject to Dispute Settlement.— Assessment
shall be deemed tentative if the duties and taxes
initially assessed are disputed by the importer.
The assessment shall be completed upon final
readjustment based on the tariff ruling in case of
classification dispute, or the final resolution of
the protest case involving valuation, rules of
origin, and other customs issues.
The District Collector may allow the release of
the imported goods under tentative assessment
upon the posting of sufficient security to cover
the applicable duties and taxes equivalent to the
amount that is disputed.
Under Sec. 425, a tentative assessment shall be
is completed:
1. Upon final readjustment based on the
tariff ruling in case of classification
dispute; or,
2. The final resolution of the protest case
involving valuation, rules of origin, and
other customs issues.
Tentative assessment may also arise from
provisional goods declaration.
Section 426. Tentative Assessment of
Provisional Goods Declaration.— Assessment of
a provisional goods declaration shall be deemed
tentative and such assessment shall be
completed upon final readjustment and
submission by the declarant of the additional
information or documentation required to
complete the declaration within the period
provided in Section 403 of this Act.
Now, in case of a dispute in the assessment, the
assessment may still be adjusted by the district
collector. The adjustment may be in the
classification of the imported goods, or the
appraisal of the goods, or the return itself.
Page 13 of 39
Q: Can the district collector modify or alter the
appraisal, classification, or return?
A: As a general rule no, except on 4 instances.
This is under Sec. 427:
Section 427. Readjustment of Appraisal,
Classification or Return.— Such appraisal,
classification or return, as finally passed upon
and approved or modified by the District
Collector, shall not be altered or modified in any
manner, except:
(1) Within one (1) year after payment of the
duties, upon statement of error in conformity
with Section 912 of this Act, as approved by the
District Collector;
(2) Within fifteen (15) days after such payment,
upon request for reappraisal or reclassification
addressed to the Commissioner by the District
Collector, if the appraisal or classification is
deemed to be low;
(3) Upon request for reappraisal and/or
reclassification, in the form of a timely protest
addressed to the District Collector by the
interested party if the latter should be
dissatisfied with the appraisal or return; or
(4) Upon demand by the Commissioner after the
completion of compliance audit in accordance
with the provisions of this Act.
Q: When does an assessment become final?
A: Assessment shall be deemed final fifteen (15)
days after receipt of notice of assessment by the
importer or consignee (Sec. 430, CMTA).
This means that after 15 days, the assessment
becomes final and the importer now is required
to pay the duties, taxes, and charges in the
assessment.
Q: What is the prescriptive period for the
assessment?
A: Section 430.
Section 430. Period of Limitation.— In the
absence of fraud and when the goods have
been finally assessed and released, the
assessment shall be conclusive upon all parties
three (3) years from the date of final payment of
duties and taxes, or upon completion of the post
clearance audit.

So, the assessment shall become conclusive
upon all parties 3 years:
1. From the date of final payment of duties
and taxes, or
2. Upon completion of the post clearance
audit.
After the payment of the final assessment, the
BOC is not precluded from demanding further
payment of the duties and taxes. In fact, the law
mandates the BOC to conduct a post clearance
audit:
Section 1000. Audit and Examination of
Records.— Within three (3) years from the date
of final payment of duties and taxes or customs
clearance, as the case may be, the Bureau may
conduct an audit examination, inspection,
verification, and investigation of records
pertaining to any goods declaration, which shall
include statements, declarations, documents,
and electronically generated or machine
readable data, for the purpose of ascertaining
the correctness of the goods declaration and
determining the liability of the importer for duties,
taxes and other charges, including any fine or
penalty, to ensure compliance with this Act.
Q: Now, what happens after the duties and
taxes have already been paid?
A: The goods declared shall be released after
compliance with all pertinent laws, rules, and
regulations.
Section 431. Release of Goods after Payment
of Duties and Taxes.— Goods declared shall be
released when duties and taxes and other lawful
charges have been paid or secured and all the
pertinent laws, rules and regulations have been
complied with.
When the Bureau requires laboratory analysis of
samples, detailed technical documents or expert
advice, it may release the goods before the
results of such examination are known after
posting of sufficient security by the declarant.
Q: Upon payment of the duties and taxes, can
the BOC withhold the release of the imported
goods?
A: As a general rule, no. Bayad na eh. This is
especially true if all the documentations have
already been filed and completed and the full
amount of duties and taxes has been paid. One
exception though is Section 435:
Section 435. Withholding Release Pending
Page 14 of 39
Satisfaction of Lien.— When the District
Collector is duly notified through a lawful order
of a competent court of a lien for freight,
lighterage or general average upon any
imported goods, the District Collector shall
withhold the release of the goods unless the
claim has been paid or secured. In case of
disagreement, the District Collector may release
the goods after payment of the freight and
lighterage due on the quantity or weight landed
as actually determined.
EXPORTATION
In exportation, what is needed is an export
declaration. All goods exported from RP,
whether subject to export duty or not, shall be
declared through an export declaration. It may
be signed electronically or otherwise by the
party making the declaration.
CUSTOMS TRANSIT AND TRANSSHIPMENT
There are two exceptions to the rule that
importation begins when the vessel enters to RP
territories with intention to unload therein. They
are:
1. Customs Transit; and,
2. Customs Transhipment.
Customs Transit
In the instances covered under customs transit,
the goods are exempt from importation taxes
and duties mainly because there is no
importation at all.
The situation contemplated here is the customs
procedure under which goods, in its original
form, is transported under customs control from
one customs office to another, or to a free zone
(Sec. 102 (rr), CTMA).
There is no importation at all because it involves
just a transfer of the goods from one office to
another.
Section 601. Duty and Tax on Goods Intended
for Transit.— Transit goods admitted for storage
in a customs bonded warehouse, or for outright
exportation at the port of destination or inland
customs office, and goods intended for transit
covered by Republic Act No. 10668, otherwise
known as “An Act Allowing Foreign Vessels to
Transport and Co-Load Foreign Cargoes for

Domestic Transshipment and for Other
Purposes”, shall not be subject to the payment
of duties and taxes at the port of entry: Provided,
That any conditions and security required by the
Bureau are complied with.
Goods for consumption and other goods
intended for customs transit not covered by the
immediately preceding paragraph shall he
subject to the payment of duties and taxes at the
port of discharge.
Q: When does customs transit happen?
A: Sec. 600:
Section 600. Customs Transit in the Customs
Territory.— Customs transit within the customs
territory shall be allowed for goods except
those intended for consumption, to be
transported as follows:
(a) From port of entry to another port of entry as
exit point for outright exportation;
(b) From port of entry to another port of entry or
inland customs office;
(c) From inland customs office to a port of entry
as exit point for outright exportation; and
(d) From one port of entry or inland customs
office to another port of entry or inland customs
office.
Q: What are basically required for customs
transit?
A: Of course there must be a transit permit:
Sec. 601. xxx xxx xxx
A transit permit is required for goods transported
under customs transit. However, transfer of
goods in customs transit from one means of
transport to another shall be allowed; Provided,
That any customs seal or fastening is not broken
or tampered.
And there must be a carrier’s security to be
posted by the imported.
Section 602. Carrier's Security.— Carriers that
transport imported goods that shall be placed
under customs transit from a port of entry to
other ports, shall post a general transportation
security amounting to at least fifty thousand
Page 15 of 39
pesos (₱50,000.00). Such security shall ensure
the complete and immediate delivery of goods to
the customs officer at the port of destination and
the payment of pertinent customs charges and
expenses and other transfer costs. The amount
of the security may be adjusted by the
Commissioner, upon approval of the Secretary
of Finance.
Going back to Sec. 601, these procedures need
to be followed. The goods must be presented
intact and in due course at the customs office of
destination. Failure to comply with the rules may
subject the goods to the corresponding duties
and taxes.
The party responsible for the compliance of the
obligations imposed on customs transit shall
ensure that the goods are presented intact and
in due course at the customs office of
destination. Failure to comply with the
aforementioned obligations or likewise failure to
follow a prescribed itinerary or period for delivery
of the goods may immediately subject the goods
to the corresponding duties, taxes and other
applicable fines, penalties, and surcharges.
Customs Transshipment
Section 603 provides that goods admitted for
transshipment shall not e subject to the payment
of tax.
Section 603. Customs Transshipment.— Goods
admitted for transshipment shall not be subject
to the payment of duties and taxes: Provided,
That the goods declaration for customs
transshipment particularly indicates such nature
of the goods, duly supported by commercial or
transport documents or evidence as required by
the Bureau.
Goods for transshipment must be exported from
the Philippines within thirty (30) days from arrival
thereof. The Commissioner may allow an
extension of such period after the establishment
of valid reasons.
Q: What does “transshipment” mean?
A: Transshipment refers to the customs
procedure under which goods are transferred
under customs control from the importing means
of transport to the exporting means of transport
within the area of one Customs office, which is
the office of both importation and exportation.

IMPORT DUTY AND TAX
Valuation of Imported Goods
Part of the assessment of duties and taxes is the
valuation of the goods imported or exported.
Under CMTA, pretty much like the TCCP, there
must have to be a basis of valuation. There are
several methods for valuation of imported goods
but we will not discuss them in detail:
1. Transaction Value System – Method One –
Transaction value shall be the price actually
paid or payable for the goods when sold for
export to the Philippines adjusted in
accordance with the provisions of CMTA
(Sec. 701, CMTA).
2. Transaction Value of Identical Goods –
Method Two – Where the dutiable value
cannot be determined under method one,
the dutiable value shall be the transaction
value of identical goods sold for export to
the Philippines and exported at or about the
same time as the goods being valued (Sec.
702, CMTA).
Q: What do we mean by “identical goods”?
A: This refers to goods which are the same
in all respects, including physical
characteristics, quality, and reputation.
Minor differences in appearance shall not
preclude goods otherwise conforming to the
definition from being regarded as identical.
3. Transaction Value of Similar Goods –
Method Three - here the dutiable value
cannot be determined under the preceding
method, the dutiable value shall be the
transaction value of similar goods sold for
export to the Philippines and exported at or
about the same time as the goods being
valued (Sec. 703, CMTA).
Q: What do we mean by “similar goods”?
A: “Similar goods” refer to goods which,
although not alike in all respects, have like
characteristics and similar component
materials which enable them to perform the
same functions and to be commercially
interchangeable. The quality of the goods,
its reputation and the existence of a
trademark shall be among the factors to be
considered in determining whether goods
are similar.
Page 16 of 39
4. Deductive Value – Method Four - Where the
dutiable value cannot be determined under
the preceding method, the dutiable value
shall be the deductive value unless
otherwise requested by the importer as
provided in Section 700 hereof. The
deductive value which shall be based on the
unit price at which the imported goods or
identical or similar imported goods are sold
in the Philippines, in the same condition as
when imported, in the greatest aggregate
quantity, at or about the time of the
importation of the goods being valued, to
persons not related to the persons from
whom they buy such goods, subject to
deductions allowed under the CTMA (Sec.
704, CMTA).
5. Computed Value – Method Five - Where the
dutiable value cannot be determined under
the preceding method, the dutiable value
shall be the computed value of the sum of:
(1) The cost or the value of materials and
fabrication or other processing employed in
producing the imported goods;
(2) The amount for profit and general
expenses equal to that usually reflected in
the sale of goods of the same class or kind
as the goods being valued which are made
by producers in the country of exportation
for export to the Philippines;
(3) The freight, insurance fees and other
transportation expenses for the importation
of the goods;
(4) Any assist, if its value is not included
under paragraph (1) hereof; and
(5) The cost of containers and packing, if
their values are not included under
paragraph (1) hereof (Sec. 705, CMTA).
6. Fallback Value – Method Six – If the dutiable
value cannot be determined under the
preceding methods described above, it shall
be determined by using other reasonable
means and on the basis of data available in
the Philippines (Sec. 706, CMTA).
These valuations methods are sequential in
application. But an exception is Deducted Value
and Computed Value. The importer may request
from the BOC that in case the transaction values

cannot be determined, the BOC computes the
goods’ value under Computed Value first rather
than the Deducted Value (Sec. 700).
SPECIAL DUTIES AND TRADE REMEDY
MEASURES
These are the measures that may be taken by
the government to protect domestic industry.
Let’s discuss them one by one.
Government’s Right of Compulsory
Acquisition
Section 709. Government's Right of
Compulsory Acquisition.— In order to protect
government revenues against undervaluation of
goods, the Commissioner may, motu proprio or
upon the recommendation of the District
Collector, acquire imported goods under
question for a price equal to their declared
customs value plus any duties already paid on
the goods, payment for which shall be made
within ten (10) working days from issuance of a
warrant signed by the Commissioner for the
acquisition of such goods.
Let’s dissect.
Q: What is the ground for the government to
exercise its right of compulsory acquisition?
A: The acquisition is necessary to protect
government revenues against undervaluation of
goods.
Take note that this right may be exercised by the
BOC motu proprio or upon the recommendation
of the District Collector.
Q: How is it done?
A: The government will issue a warrant for the
acquisition of goods. The warrant shall be
signed by the COC. The warrant shall state that
the government intends to acquire imported
goods under question for a price equal to their
declared customs value plus any duties already
paid on the goods.
Q: When will the government pay the importer?
A: Payment shall be made within 10 working
days from issuance of a warrant.
Q: Can the importer challenge this?
A: Yes.
Page 17 of 39
Sec. 709. xxx xxx xxx
An importer who is dissatisfied with a decision of
the Commissioner pertaining to this section may,
within twenty (20) working days after the date on
which notice of the decision is given, appeal to
the Secretary of Finance, and thereafter if still
dissatisfied, to the CTA as provided for in
Section 1136 of this Act.
Q: How shall the challenge be done?
A: The importer shall file an appeal with the
SOF.
Q: When should the appeal be made?
A: The appeal should be made within 20 working
days after receipt of the notice of the decision for
compulsory acquisition of the goods.
Q: What happens when there is no appeal
made?
A: Well, the government acquires the imported
goods. Also, the government may sell the
acquired goods pursuant to existing laws and
regulations or dispose it in any manner pursuant
to existing laws.
Take note of the last paragraph:
Nothing in this section limits or affects any other
powers of the Bureau with respect to the
disposition of the goods or any liability of the
importer or any other person with respect to an
offense committed in the importation of the
goods.
The succeeding items deal with the Special
Tariffs composing of:
1. Marking duty;
2. Anti-dumping Duty;
3. Safeguard Duty;
4. Countervailing Duty; and,
5. Discriminatory Duty.
Marking of Imported Goods and Containers
and Marking Duty
One of importation is the proper marking of (1)
goods and (2) the containers.
Under Section 710, except as provided by the
CMTA, all goods of foreign origin imported into
the RP or their containers shall be
conspicuously marked in any official language of
the Philippines. The marking must indicate the
name of the country of origin of the goods.

Exceptions for marking:
1. Goods are incapable of being marked;
2. Goods cannot be marked prior to
shipment to the RP without injury;
3. Goods cannot be marked prior to
shipment to the RP, except at an
expense economically prohibitive of
their importation;
4. The marking of a container of such
goods will reasonably indicate the origin
of such goods;
5. Goods are crude substances;
6. Goods are imported for use by importer
and not intended for sale in their
imported or any other form;
7. Goods are to be processed in the
Philippines by the importer or for the
importer's account other than for the
purpose of concealing the origin of such
goods and in such manner that any
mark contemplated by this section
would necessarily be obliterated,
destroyed, or permanently concealed;
8. An ultimate purchaser, by reason of the
character of such goods or by reason of
the circumstances of their importation,
must necessarily know the country of
origin of such goods even though they
are not marked to indicate their origin;
9. Such goods were produced more than
twenty (20) years prior to their
importation into the Philippines; or,
10. Such goods cannot be marked after
importation except at an expense which
is economically prohibitive, and the
failure to mark the goods before
importation was not due to any purpose
of the importer, producer, seller or
shipper to avoid compliance with this
section.
Q: What are the effects for failure to mark?
A: The effects are:
1. Imposition of a MARKING DUTY - The
importer shall be subjected to affine for
Page 18 of 39
failure to mark. It’s 5% of the dutiable
value of the goods.
2. Release shall be withheld until proper
marking has been done.
3. If after having been ordered to properly
marked the goods, within 30 days after
due notice, such refusal shall constitute
an act of ABANDONMENT of goods.
The disposition of abandoned goods will
then be taken by the BOC.
Anti-dumping Duty
Section 711 CMTA adopted the Anti-Dumping
Act of 1999 (RA 8752).
Q: What is “Anti-dumping Duty?”
A: Anti-dumping duty is a special duty imposed
on the importation of a product, commodity, or
article of commerce in the Philippines:
 At less than its normal value when
destined for domestic consumption in
the exporting country;
 Which importation is causing or is
threatening to cause:
o material injury to a domestic
industry, or
o materially retards the
establishment of a domestic
industry producing like product
In simple terms, anti-dumping duty is imposed
on underpriced articles. The under pricing is
causing, or is threatening to cause material
injury to a domestic industry.
Q: How much is the anti-dumping duty?
A: It is the difference between the export price
and the normal value of such article.
Q: Who imposes anti-dumping duties?
A: Different agencies are involved:
1. Secretary of Trade and Industry for non-
agri products;
2. Secretary of Agriculture in case of agri
products; and,
3. Tariff Commission.
There will be a written application submitted.
And then there will be a formal investigation.
Then there will be a determination by the Tariff

Commission whether or not the grounds for the
imposition of Anti-dumping Duty exist.
But even if there is a finding that there are
grounds present, the decision of whether or not
to impose a definitive anti-dumping duty remains
the prerogative of the Tariff Commission.
The duration of the definitive anti-dumping duty
shall not exceed 5 years from the date of its
imposition unless the tariff commission has
determined in a review that such duty is no
longer necessary.
Q: What is the remedy of the aggrieved party?
A: Any interest party may file with the CTA a
petition for review within 30 days from receipt of
the notice of the final ruling.
Q: What is the meaning of “interested party”
here?
A: This can be the importer or this can even be
the Secretary of Trade and Industry or the
Secretary of Agriculture, as the case may be
(Southern Cross v. Philippine Cement
Manufacturers, GR 158540, 8 July 2004).
Take note that the filing of such petition for
review shall not in any way stop, suspend, or
otherwise hold the imposition or collection, of the
anti-dumping duty. This is of course without
prejudice on the CTA’s authority to issue an
injunction in proper cases on the ground that the
collection of such duty would jeopardize the
interest of the government or the taxpayer.
Safeguard Duty
Section 712 adopted RA 8800, the Safeguard
Measures Act.
These are emergency measures, including
tariffs, to protect domestic industries and
producers from increased imports which inflict or
could inflict serious injury on them.
Q: Who has the authority to impose such
safeguard measures?
A: It is the SA for agri products, STI for non-agri
products, and only upon a positive final
determination of the TC.
Section 5 of RA 8800 provides for the conditions
for the application of general safeguard
measures:
Page 19 of 39
Sec. 5. Conditions for the Application of General
Safeguard Measures. – The Secretary shall
apply a general safeguard measure upon a
positive final determination of the Commission
that a product is being imported into the country
in production, as to be a substantial cause of
serious injury or threat thereof to the domestic
industry; however, in case of non-agricultural
products, the Secretary shall first establish that
the application of such safeguard measures will
be in the public interest.
Q: What is the remedy of any interested party?
A: It’s pretty much the same with the anti-
dumping duty.
A petition for review within 30 days from receipt
of the ruling may be filed before the CTA.
The petition shall not stop or suspend the
collection of the safeguard measure without
prejudice to the CTA’s authority to issue an
injunction in proper cases.
Countervailing Duty
Countervailing duty is the additional customs
duties imposed on any product, commodity or
article of commerce:
 Which is granted directly in indirectly
by the government in the country of
origin or exportation
,
 Any kind or form of specific subsidy
upon the production, manufacture,
or exportation of such product,
commodity, or article, and,
 The importation of the subsidized
product has cause or threatens to
cause
o material injury to a domestic
industry, or
o has materially retarded the
growth or prevents the
establishment of a domestic
industry.
In effect, the imported article is so cheap
because of the subsidy provided by the foreign
government that its importation in the Philippines
would materially affect local industries. To

counter such act, a countervailing duty is
imposed on such article.
Q: What is the amount of the countervailing
duty?
A: It is equivalent to the bounty, subsidy, or
subvention.
Q: Who are the imposing authorities?
A: STI and SA but the final decision remains
with the TC.
Q: What is the remedy of any interested party
affected?
A: Still the same – petition for review with the
CTA within 30 days after receipt of notice of
such imposition.
Again, the filing of the petition shall not stop or
suspend the imposition and collection of the duty
without prejudice to the CTA’s authority to issue
injunction in proper cases.
Discriminatory Duty
This is under Sec. 714 of the CMTA:
Section 714. Discrimination by Foreign
Countries.— Without prejudice to the Philippine
commitment in any ratified international
agreements or treaty, the following recourse
shall be applicable in case of discrimination by
foreign countries:
(a) When the President finds that the public
interest will be served thereby, the President
shall, by proclamation, specify and declare new
or additional duties in an amount not exceeding
one hundred percent (100%) ad valorem upon
goods wholly or in part the growth or product of,
or imported in a vessel of any foreign country
whenever the President shall find as a fact that
such country:
Q: What do we mean by “discriminatory duty”?
A: In essence, discriminatory duty is imposed
upon articles wholly or in part of the growth or
product of or imported in any vessel of, any
foreign country which discriminates or places
undue disadvantage on Philippine products
exported to such foreign country.
Q: Who imposes discriminatory duty?
A: It is the President of the Philippines.
Q: What are the grounds?
Page 20 of 39
A: It is when the President finds for a fact that
such foreign country:
(1) Imposes, directly or indirectly, up on the
disposition or transportation in transit or through
reexportation from such country of any goods
wholly or in part the growth or product of the
Philippines, any unreasonable charge,
exaction, regulation or limitation which is not
equally enforced upon the like goods of
every foreign country; or
(2) Discriminates in fact against the commerce
of the Philippines, directly or indirectly, by law or
administrative regulation or practice, by or in
respect to any customs, tonnage, or port
duty, fee, charge, exaction, classification,
regulation, condition, restriction or
prohibition, in such manner as to place the
commerce of the Philippines at a
disadvantage compared with the commerce of
any foreign country.
Q: What are the effects if after the imposition of
discriminatory duty, the foreign country involves
continues to maintain or increases such
discriminatory practices?
A: Then the president may do the following:
Section 714. xxx xxx xxx
(b) If at any time the President shall find it to be
a fact that any foreign country has not only
discriminated against the commerce of the
Philippines, as aforesaid, but has, after the
issuance of a proclamation as authorized in
subsection (a) of this section, maintained or
increased its said discrimination against the
commerce of the Philippines, the President is
hereby authorized, if deemed consistent with the
interests of the Philippines and of public interest,
to issue a further proclamation directing that
such product of said country or such goods
imported in their vessels be excluded hom
importation into the Philippines.
(c) Any proclamation issued by the President
under this section shall, if the President deems it
consistent with the interest of the Philippines,
extend to the whole of any foreign country or
may be confined to any subdivision or
subdivisions thereof; Provided, That the
President may, whenever the public interest
requires, suspend, revoke, supplement or
amend any such proclamation.

(d) All goods imported contrary to the provisions
of this section shall be forfeited to the
government of the Philippines and shall be liable
to be seized, prosecuted and condemned in like
manner and under the same regulations,
restrictions, and provisions as may from time to
time he established for the recovery, collection,
distribution, and remission or forfeiture to the
government by the tariff and customs laws.
Whenever the provision of this section shall be
applicable to importations into the Philippines of
goods wholly or in part the growth or product of
any foreign country, it shall be applicable
thereto, whether such goods are imported
directly or indirectly.
(e) It shall be the duty of the Commission to
ascertain and at all times be informed whether
any of the discriminations against the commerce
of the Philippines enumerated in subsections (a)
and (b) of this section are practiced by any
country; and if and when such discriminatory
acts are disclosed, it shall be the duty of the
Commission to bring the matter to the attention
of the President, and to recommend measures
to address such discriminatory acts.
(f) The Secretary of Finance shall make such
rules and regulations as are necessary for the
execution of a proclamation that the President
may issue in accordance with the provisions of
this section.
To summarize:
1. The President can issue a proclamation
directing that such product of the said
country be excluded from importation in
the RP, consistent with public interest.
2. This proclamation, whenever the
president deems that public interest
requires it, may be suspended, revoked,
supplemented, or amended.
3. All articles imported, even with the
proclamation, shall be forfeited to the
GRP and shall be liable to be seized,
prosecuted, and condemned.
CONDITIONALLY TAX AND/OR DUTY
EXEMPT IMPORTATION
Section 800. Conditionally Tax and/or Duty-
Exempt Importation.— The following goods shall
Page 21 of 39
be exempt from the payment of import duties
upon compliance with the formalities
prescribed in the regulations which shall be
promulgated by the Commissioner with the
approval of the Secretary of Finance: Provided,
That goods sold, bartered, hired or used for
purposes other than what they were intended for
and without prior payment of the duty, tax or
other charges which would have been due and
payable at the time of entry if the goods had
been entered without the benefit of this section,
shall be subject to forfeiture and the importation
shall constitute a fraudulent practice against
customs laws: Provided, However, That a sale
pursuant to a judicial order or in liquidation of the
estate of a deceased person shall not be subject
to the preceding proviso, without prejudice to the
payment of duties, taxes and other charges;
Provided, Further, That the President may,
upon the recommendation of the Secretary
of Finance, suspend, disallow or completely
withdraw, in whole or in part, any conditionally
free importation under this section:
(a) Aquatic products such as fishes,
crustaceans, mollusks, marine animals,
seaweeds, fish oil, roe, caught or gathered by
fishing vessels of Philippine registry; Provided,
That they are imported in such vessels or in
crafts attached thereto; Provided, However, That
they have not been landed in any foreign
territory or, if so landed, that they have been
landed solely for transshipment without having
been advanced in condition;
(b) Equipment for use in the salvage of vessels
or aircrafts, not available locally, upon
identification and the giving of a security in an
amount equal to one hundred percent (100%) of
the ascertained duties, taxes and other charges
thereon, conditioned for the exportation thereof
or payment of corresponding duties, taxes and
other charges within six (6) months from the
date of acceptance of the goods declaration;
Provided, That the Bureau may extend the time
for exportation or payment of duties, taxes and
other charges for a term not exceeding six (6)
months from the expiration of the original period;
(c) Cost of repairs, excluding the value of the
goods used, made in foreign countries upon
vessels or aircraft documented, registered or
licensed in the Philippines, upon proof
satisfactory to the Bureau: (1) that adequate
facilities for such repairs are not afforded in the
Philippines; or (2) that such vessels or aircrafts,

while in the regular course of their voyage or
flight, were compelled by stress of weather or
other casualty to put into a foreign port to make
such repairs in order to secure the safety,
seaworthiness, or airworthiness of the vessels or
aircrafts to enable them to reach their port of
destination;
(d) Goods brought into the Philippines for repair,
processing or reconditioning to be reexported
upon completion of the repair, processing or
reconditioning: Provided, That the Bureau shall
require security equal to one hundred percent
(100%) of the duties, taxes and other charges
thereon, conditioned for the exportation thereof
or payment of the corresponding duties, taxes
and other charges within six (6) months from the
date of acceptance of the goods declaration;
(e) Medals, badges, cups, and other small
goods bestowed as trophies or prizes, or those
received or accepted as honorary distinction;
(f) Personal and household effects belonging to
returning residents including household
appliances, jewelry, precious stones, and other
goods of luxury which were formally declared
and listed before departure and identified under
oath before the District Collector when exported
from the Philippines by such returning residents
upon their departure therefrom or during their
stay abroad; personal and household effects
including wearing apparel, goods of personal
adornment, toilet goods, instruments related to
one's profession and analogous personal or
household effects, excluding luxury items,
vehicles, watercrafts, aircrafts and animals
purchased in foreign countries by residents of
the Philippines which were necessary,
appropriate, and normally used for their comfort
and convenience during their stay abroad,
accompanying them on their return, or arriving
within a reasonable time which, barring
unforeseen and fortuitous events, in no case
shall exceed sixty (60) days after the owner's
return.
For purposes of this section, the phrase
“returning residents” shall refer to nationals who
have stayed in a foreign country for a period of
at least six (6) months. Returning residents shall
have tax and duty exemption on personal and
household effects: Provided, That:
(1) It shall not be in commercial
quantities;
Page 22 of 39
(2) It is not intended for barter, sale or for
hire; and
(3) Limited to the FCA or FOB value of:
(i) Three hundred fifty thousand
pesos (₱350,000.00) for those
who have stayed in a foreign
country for at least ten (10) years
and have not availed of this
privilege within ten (10) years prior
to returning resident's arrival;
(ii) Two hundred fifty thousand pesos
(₱250,000.00) for those who have
stayed in a foreign country for a
period of at least five (5) but not
more than ten (10) years and have
not availed of this privilege within
five (5) years prior to returning
resident's arrival; or,
(iii) One hundred fifty thousand pesos
(₱150,000.00) for those who have
stayed in a foreign country for a
period of less than five (5) years and
have not availed of this privilege
within six (6) months prior to
returning resident's arrival.
Any amount in excess of the above-stated
threshold shall be subject to the corresponding
duties and taxes under this Act.
Every three (3) years after the effectivity of this
Act, the Secretary of Finance shall adjust the
amount herein stated to its present value using
the CPI as published by the PSA.
In addition to the privileges granted under the
immediately preceding paragraph, returning
Overseas Filipino Workers (OPWs) shall have
the privilege to bring in, tax and duty-free, home
appliances and other durables, limited to one
of every kind once in a given calendar year
accompanying them on their return, or
arriving within a reasonable time which,
barring unforeseen and fortuitous events, in no
case shall exceed sixty (60) days after every
returning OFW's return upon presentation of
their original passport at the port of entry:
Provided, That any amount in excess of FCA
value of one hundred fifty thousand pesos
(₱150,000.00) for personal and household
effects or of the number of duty-free appliances
as provided for under this section, shall be
subject to the corresponding taxes and duties;
Provided, Further, That every three (3) years

after the effectivity of this Act, the Secretary of
Finance shall adjust the amount herein stated to
its present value using the CPI as published by
the PSA;
(g) Residents of the Philippines, OPWs or other
Filipinos while residing abroad or upon their
return to the Philippines shall be allowed to bring
in or send to their families or relatives in the
Philippines balikbayan boxes which shall be
exempt from applicable duties and taxes
imposed under the NIRC of 1997, as amended:
Provided, That balikbayan boxes shall contain
personal and household effects only and shall
neither be in commercial quantities nor intended
for barter, sale or for hire and that the FCA value
of which shall not exceed one hundred fifty
thousand pesos (₱150,000.00); Provided,
Further, That every three (3) years after the
effectivity of this Act, the Secretary of Finance
shall adjust the amount herein stated to its
present value using the CPI as published by the
PSA; Provided, Finally, That residents of the
Philippines, OFWs or other Filipinos can only
avail of this privilege up to three (3) times in a
calendar year. Any amount in excess of the
allowable non-dutiable value shall be subject to
the applicable duties and taxes;
(1) For purposes of this Act, OFWs referto
Holders of valid passports duly issued by
the Department of Foreign Affairs (DFA)
and certified by the Department of Labor
and Employment (DOLE) or the Philippine
Overseas Employment Administration
(POEA) for overseas employment
purposes. They cover all Filipinos, working
in a foreign country under employment
contracts, regardless of their professions,
skills or employment status in a foreign
country; and (2) Calendar Year refers to
the period from January 1 to December
31.
(h) Wearing apparel, goods of personal
adornment, toilet goods, portable tools and
instruments, theatrical costumes and similar
effects accompanying travelers, or tourists, or
arriving within a reasonable time before or after
their arrival in the Philippines, which are
necessary and appropriate for the wear and use
of such persons according to the nature of the
journey, their comfort and convenience;
Provided, That this exemption shall not apply to
goods intended for other persons or for barter,
sale or hire: Provided, However, That the
Page 23 of 39
Bureau may require either a written commitment
or a security in an amount equal to one hundred
percent (100%) of the ascertained duties, taxes
and other charges thereon, conditioned for the
exportation thereof or payment of the
corresponding duties, taxes and other charges
within three (3) months from the date of
acceptance of the goods declaration: Provided,
Further, That the Bureau may extend the time
for exportation or payment of duties, taxes and
other charges for a term not exceeding three (3)
months from the expiration of the original period.
Personal and household effects and vehicles
belonging to foreign consultants and experts
hired by, or rendering service to, the
government, and their staff or personnel and
families accompanying them or arriving within a
reasonable time before or after their arrival in
the Philippines, in quantities and of the kind
necessary and suitable to the profession, rank or
position of the person importing said items, for
their own use and not for barter, sale or hire:
Provided, That the Bureau may require either a
written commitment or a security in an amount
equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges
thereon, upon the goods classified under this
subsection; conditioned for the exportation
thereof or payment of the corresponding duties,
taxes and other charges within three (3) months
after the expiration of their term or contract;
Provided, However, That the Bureau may
extend the time for exportation or payment of
duties, taxes and other charges for a term not
exceeding three (3) months from the expiration
of the original period;
(i) Professional instruments and implements,
tools of trade, occupation or employment,
wearing apparel, domestic animals, and
personal and household effects belonging to
persons coming to settle in the Philippines or
Filipinos or their families and descendants who
are now residents or citizens of other countries,
such parties hereinafter referred to as overseas
Filipinos, in quantities and of the class suitable
to the profession, rank or position of the persons
importing said items, for their own use and not
for barter or sale, accompanying such persons,
or arriving within a reasonable time: Provided,
That the Bureau may, upon the production of
satisfactory evidence that such persons are
actually coming to settle in the Philippines and
that the goods are brought from their former
place of abode, exempt such goods from the

payment of duties and taxes; Provided, Further,
That vehicles, vessels, aircrafts, machineries
and other similar goods for use in manufacture,
shall not fall within this classification and shall
therefore be subject to duties, taxes and other
charges;
(j) Goods used exclusively for public
entertainment, and for display in public
expositions, or for exhibition or competition for
prizes, and devices for projecting pictures and
parts and appurtenances thereof, upon
identification, examination, and appraisal and
the giving of a security in an amount equal to
one hundred percent (100%) of the ascertained
duties, taxes and other charges thereon,
conditione d for exportation thereof or payment
of the corresponding duties, taxes and other
charges within three (3) months from the date of
acceptance of the goods declaration: Provided,
That the Bureau may extend the time for
exportation or payment of duties, taxes and
other charges for a term not exceeding three (3)
months from the expiration of the original period;
and technical and scientific films when imported
by technical, cultural and scientific institutions,
and not to be exhibited for profit: Provided,
Further, That if any of the films is exhibited for
profit, the proceeds therefrom, shall be subject
to confiscation, in addition to the penalty
providedamder this Act;
(k) Goods brought by foreign film producers
directly and exclusively used for making or
recording motion picture films on location in the
Philippines, upon their identification,
examination and appraisal and the giving of a
security in an amount equal to one hundred
percent (100%) of the ascertained duties, taxes
and other charges thereon, conditioned for
exportation thereof or payment of the
corresponding duties, taxes and other charges
within three (3) months from the date of
acceptance of the goods declaration, unless
extended by the District Collector for another
three (3) months; photographic and
cinematographic films, underdeveloped,
exposed outside the Philippines by resident
Filipino citizens or by producing companies of
Philippine registry where the principal actors and
artists employed for the production are Filipinos,
upon affidavit by the importer and identification
that such exposed films are the same films
previously exported from the Philippines. As
used in this paragraph, the terms “actors” and
“artists” include the persons operating the
Page 24 of 39
photographic camera or other photographic and
sound recording apparatus by which the film is
made;
(l) Importations for the official use of foreign
embassies, legations and other agencies of
foreign governments: Provided, That those
foreign countries accord like privileges to
corresponding agencies of the Philippines.
Goods imported for the personal or family use of
members and attaches of foreign embassies,
legations, consular officers and other
representatives of foreign governments;
Provided, However, That such privilege shall be
accorded under special agreements between
the Philippines and the countries which they
represent: Provided, Further, That the privilege
may be granted only upon specific instructions
of the Secretary of Finance pursuant to an
official request of the DFA on behalf of members
or attaches of foreign embassies, legations,
consular officers and other representatives of
foreign governments;
(m) Imported goods donated to or, for the
account of the Philippine government or any
duly registered relief organization, not operated
for profit, for free distribution among the needy,
upon certification by theDSWD or the
Department of Education (DepED), or the
Department of Health (DOH), as the case may
be;
(n) Containers, holders and other similar
receptacles of any material including kraft paper
bags for locally manufactured cement for export,
including corrugated boxes for bananas,
mangoes, pineapples and other fresh fruits for
export, except other containers made of paper,
paperboard and textile fabrics, which are of such
character as to be readily identifiable and/or
reusable for shipment or transportation of goods
shall be delivered to the importer thereof upon
identification, examination and appraisal and the
giving of a security in an amount equal to one
hundred percent (100%) of the ascertained
duties, taxes and other charges thereon, within
six (6) months from the date of acceptance of
the goods declaration;
(o) Supplies which are necessary for the
reasonable requirements of the vessel or aircraft
in its voyage or flight outside the Philippines,
including goods transferred from a bonded
warehouse in any Customs District to any vessel
or aircraft engagedin foreign trade, for use or

consumption of the passengers or its crew on
board such vessel or aircraft as sea or air
stores; or goods purchased abroad for sale on
board a vessel or aircraft as saloon stores or air
store supplies; Provided, That any surplus or
excess of such vessel or aircraft supplies
arriving from foreign ports or airports shall be
dutiable;
(p) Goods and salvage from vessels recovered
after a period of two (2) years from the date of
filing the marine protest or the time when the
vessel was wrecked or abandoned, or parts of a
foreign vessel or its equipment, wrecked or
abandoned in Philippine waters or elsewhere:
Provided, That goods and salvage recovered
within the said period of two (2) years shall be
dutiable;
(q) Coffins or urns containing human remains,
bones or ashes, used personal and household
effects (not merchandise) of the deceased
person, except vehicles, the FCA value of which
does not exceed one hundred fifty thousand
pesos (₱150,000.00), upon identification as
such: Provided, That every three (3) years after
the effectivity of this Act, the value herein stated
shall be adjusted to its present value using the
CPI as published by the PSA;
(r) Samples of the kind, in such quantity and of
such dimension or construction as to render
them unsaleable or of no commercial value;
models not adapted for practical use; and
samples of medicines, properly marked “sample-
sale punishable by law”, for the purpose of
introducing new goods in the Philippine market
and imported only once in a quantity sufficient
for such purpose by a person duly registered
and identified to be engaged in that trade:
Provided, That importations under this
subsection shall be previously authorized by the
Secretary of Finance: Provided, However, That
importation of sample medicines shall have
been previously authorized by the Secretary of
Health, and that such samples are new
medicines not available in the Philippines:
Provided, Further, That samples not previously
authorized or properly marked in accordance
with this section shall be levied the
corresponding tariff duty.
Commercial samples, except those that are not
readily and easily identifiable as in the case of
precious and semi-precious stones, cut or uncut,
and jewelry set with precious or semi-precious
Page 25 of 39
stones, the value of any single importation of
which does not exceed FCA value of fifty
thousand pesos (₱50,000.00) upon the giving of
a security in an amount equal to the ascertained
duties, taxes and other charges thereon,
conditioned for the exportation of said samples
within three (3) months from the date of the
acceptance of the goods declaration or in default
thereof, the payment of the corresponding
duties, taxes and other charges: Provided, That
if the FCA value of any single consignment of
such commercial samples exceeds fifty
thousand pesos (₱50,000.00), the importer
thereof may select any portion of the same not
exceeding the FCA value of fifty thousand pesos
(₱50,000,00) for entry under the provision of this
subsection, and the excess of the consignment
may be entered in bond, or for consumption, as
the importer may elect: Provided, Further, That
every three (3) years after the effectivity of this
Act, the Secretary of Finance shall adjust the
amount herein stated to its present value using
the CPI as published by the PSA.
(s) Animals, except race horses, and plants for
scientific, experimental propagation or breeding,
andfor other botanical, zoological and national
defense purposes: Provided, That no live trees,
shoots, plants, moss and bulbs, tubers and
seeds for propagation purposes may be
imported under this section, except by order of
the government or other duly authorized
institutions; Provided, However, That the free
entry of animals for breeding purposes shall be
restricted to animals of recognized breed, duly
registered in the record or registry established
for that breed, and certified as such by the
Bureau of Animal Industry (BAI): Provided,
Further, That the certification of such record,
and pedigree of such animal duly authenticated
by the proper custodian of such record or
registry, shall be submitted to the District
Collector, together with the affidavit of the owner
or importer that such animal is the animal
described in said certificate of record and
pedigree: Provided, Finally, That the animals
and plants are certified by the NEDA as
necessary for economic development;
(t) Economic, technical, vocational, scientific,
philosophical, historical and cultural books or
publications, and religious books like Bibles,
missals, prayer books, the Koran, Ahadith and
other religious books of similar nature and
extracts therefrom, hymnal and hymns for
religious uses; Provided, That those which may

have already been imported but are yet to be
released by the Bureau at the effectivity of this
Act may still enjoy the privilege herein provided
upon certification by the DepED that such
imported books and/or publications are for
economic, technical, vocational, scientific,
philosophical, historical or cultural purposes or
that the same are educational, scientific or
cultural materials covere d by the International
Agreement on Importation of Educational
Scientific and Cultural Materials (XAESCM)
signed by the President of the Philippines on
August 2, 1952, or other agreements binding
upon the Philippines. Educational, scientific and
cultural materials covered by international
agreements or commitments binding upon the
Philippine government so certified by the
DepED.
(u) Philippine goods previously exported from
the Philippines and returned without having
been advanced in value, or improved in
condition by any process of manufacturing or
other means, and upon which no drawback or
bounty has been allowed, including instruments
and implements, tools of trade, machinery and
equipment, used abroad by Filipino citizens in
the pursuit of their business, occupation or
profession; and foreign goods previously
imported when returned after haiffif been
exported and loaned for use temporarily abroad
solely for exhibition, testing and
experimentation, for scientific or educational
purposes; and foreign containers previously
imported which have been used in packing
exported Philippine goods and returned empty if
imported by or for the account of the person or
institution who exported them from the
Philippines and not for sale, barter or hire
subject to identification: Provided, That
Philippine goods falling under this subsection
upon which drawback or bounty have been
allowed shall, upon reimportation thereof, be
subject to a duty under this subsection equal to
the amount of such drawback or bounty;
(v) Aircraft, equipment and machinery, spare
parts, commissary and catering supplies,
aviation gas, fuel and oil, whether crude or
refined except when directly or indirectly used
for domestic operations, and such other goods
or supplies imported by and for the use of
scheduled airlines operating under
congressional franchise: Provided, That such
goods or supplies are not locally available in
reasonable quantity, quality and price and are
Page 26 of 39
necessary or incidental to the proper operation
of the scheduled airline importing the same;
(w) Machineries, equipment, tools for
production, plans to convert mineral ores into
saleable form, spare parts, supplies, materials,
accessories, explosives, chemicals, and
transportation and communications facilities
imported by and for the use of new mines and
old mines which resume operations, when
certified to as such by the Secretary of the
Department of Environment and Natural
Eesources (DENE), upon the recommendation
of the Director of Mines and Geosciences
Bureau, for a period ending five (5) years from
the first date of actual commercial production of
saleable mineral products: Provided, That such
goods are not locally available in reasonable
quantity, quality and price and are necessary or
incidental in the proper operation of the mine;
and aircrafts imported by agro-industrial
companies to be used by them in their
agriculture and industrial operations or activities,
spare parts and accessories thereof, when
certified to as such by the Secretary of the
Department of Agriculture (DA) or the Secretary
of the Department of Trade and Industry (DTI),
as the case may be;
(x) Spare parts of vessels or aircraft of foreign
registry engaged in foreign trade when brought
into the Philippines exclusively as replacements
or for the emergency repair thereof, upon proof
satisfactory to the District Collector that such
spare parts shaft he utilized to secure the safety,
seaworthiness or airworthiness of the vessel or
aircraft, to enable it to continue its voyage or
flight;
(y) Goods exported from the Philippines for
repair, processing or reconditioning without
having been substantially advanced in value,
and subsequently reimported in its original form
and in the same state: Provided, That in case
the reimported goods advanced in value,
whether or not in their original state, the value
added shall be subject to the applicable duty
rate of the tariff heading of the reimported
goods; and
(z) Trailer chassis when imported by shipping
companies for their exclusive use in handling
containerized cargo, upon posting a security in
an amount equal to one hundred percent (100%)
of the ascertained duties, taxes and other
charges due thereon, to cover aperiod of one (1)

year from the date of acceptance of the entry,
which period, for meritorious reasons, may be
extended by the Commissioner from year to
year, subject to the following conditions:
(1) That they shall be properly identified
and registered with the Land
Transportation Office (LTO);
(2) That they shall be subject to customs
supervision fee to be fixed by the
District Collector and subject to the
approval of the Commissioner;
(3) That they shall be deposited in the
customs territory when not in use; and
(4) That upon the expiration of the period
prescribed above, duties and taxes shall
be paid unless otherwise reexported.
(aa) Any officer or employee of the DEA,
including any attache, civil or military or member
of the staff assigned to a Philippine diplomatic
mission abroad by the Department or any similar
officer or employee of other departments
assigned to any Philippine consular office
abroad, or any AFP military personnel accorded
assimilated diplomatic rank or on duty abroad
who is returning from a regular assignment
abroad, for reassignment to the home office, or
who dies, resigns, or is retired from the service,
after the approval of this Act, shall be exempt
from the payment of all duties and taxes on
personal and household effects, including one
(1) motor car which must have been ordered or
purchased prior to the receipt by the mission or
consulate of the order of recall, and which must
be registered in the name of the officer or
employee: Provided, That this exemption shall
apply only to the value of the motor car and to
the aggregate assessed value of the personal
and household effects, the latter not to exceed
thirty percent (30%) of the total amount received
by the officer or employee in salary and
allowances during the latest assignment abroad,
but not to exceed four (4) years: Provided,
However, That this exemption shall not be
availed of more than once every four (4) years:
Provided, Further, That the officer or employee
concerned must have served abroad for not less
than two (2) years.
The provisions of general and special laws, to
the contrary notwithstanding, including those
granting franchises, there shall be no exemption
Page 27 of 39
whatsoever from the payment of duties except
as provided for in this Act; those granted to
government agencies, instrumentalities or
government-owned or -controlled corporations
(GOCCs) with existing contracts, commitments,
agreements, or obligations with foreign countries
requiring such exemption; those granted to
international institutions, associations or
organizations entitled to exemption pursuant to
agreements or special laws; and those that may
be granted by the President upon prior
recommendation of the NEDA in the interest of
national economic development.
This is a very long provision. We will discuss
only a few.
Personal and Household Effects Belonging
to Returning Residents (f)
This is for returning residents.
“Returning residents” shall refer to nationals who
have stayed in a foreign country for a period of
at least 6 months.
1. Luxuries - Household appliance, jewelry,
precious stones, and other goods of luxury.
This should formally be declared and listed
before departure and identified under oath
before the district collector when these items are
exported with the Philippines. In other words,
these luxuries should have been exported in the
Philippines and the returning residents brought
them back.
2. Personal and household effects belonging to
returning residents excluding luxury items,
vehicles, crafts, and animals purchased in
foreign countries for comfort and convenience.
On both instances above, the goods should
have accompanied the returning residents or
arrived in the Philippines within 60 days except
of the late arrival was due to unforeseen and
fortuitous events.
Q: What are the other conditions for free
importations of these goods by returning
residents?
A: They are:
1. It shall not be in commercial quantities;
2. Not intended for barter, sale, or hire,
3. Limited value of:

a. 300K for those who have stayed
for at least 10 years and not
availed of this privilege within 10
years prior to return;
b. 250K for those who have stayed
in a foreign country for at least 5
but not more than 10 years
without having availed of
privilege within 5 years prior to
returning.
c. 150k for those staying in a
foreign country for a period less
than 5 years.
Any amount in excess of the values shall be
subject to duties and taxes.
OFWS
For OFWs, there are two situations here:
1. Importation of Home Appliances and
other durables (Section 800 (f), CMTA);
and,
2. Balikbayan boxes (Sec. 800 (g),
CMTA).
Home Appliance and other Durables
Q: What are the requirements?
A: The requirements are as follows:
1. The goods involved are home
appliances and other durables;
2. Limited to one of every kind;
3. Once in a given calendar year
4. The goods accompanied them upon
arrival or arrived within a reasonable
time not exceeding 60 days except for
reason of unforeseen or fortuitous
events
5. The amount shall not exceed P150,000
6. Presentation of passport at the port of
entry.
Balikbayan Boxes
Q: Who are the persons who may avail of this
tax exemption?
A: They are:
1. Residents of the Philippines;
2. OFWs; or
3. Other Filipinos while residing abroad or
upon their return to the Philippines.
They are allowed to bring in or send to their
families or relatives Philippine balikbayan boxes
Page 28 of 39
which shall be exempt from duties and taxes
imposed under NIRC.
Q: What are the requirements for tax exemption
of balikbayan boxes?
1. The boxes shall contain personal and
household effects only and shall neither
be in commercial quantities nor intended
for sale, barter, or hire;
2. The FCA value does not exceed
P150,000;
3. The Phil. Residents, OFWs or other
Filipinos can only avail of the privilege
up to 3x in a calendar year.
Any amount in excess shall be subject to duties
and taxes.
OFWs for purposes of this exemption, refer to
holders of DFA passports certified by the DOLE
or POEA for overseas employment purposes.
REFUND AND ABATEMENT
Q: When should a tax refund be granted?
A: Sec. 903:
Section 903. Refund of Duties and Taxes.—
Refund shall be granted where it is established
that duties and taxes have been overcharged
as a result of an error in the assessment or
goods declaration.
Where permission is given by the Bureau for
goods originally declared for a customs
procedure with payment of duties and taxes to
be placed under another customs procedure, a
refund shall be made of any duties and taxes
charged in excess of the amount due under the
new procedure, subject to such regulation
issued for the purpose.
A refund shall not be granted if the amount of
duties and taxes involved is less than five
thousand pesos (₱5,000.00); Provided, That the
Secretary of Finance, in consultation with the
Commissioner, may adjust the minimum amount
specified in this Act, taking into account the CPI
as published by the PSA.
Q: What about abatement?
A: Section 904.
Section 904. Abatement of Duties and Taxes.—
When goods have not yet been released for
consumption or have been placed under another

customs procedure, provided that no other
offense or violation has been committed, the
declarant shall neither be required to pay the
duties and taxes nor be entitled to refund thereof
in any of the following cases:
(a) When, at the request of the declarant, the
goods are abandoned, or as determined by the
Bureau, the goods are destroyed or rendered
commercially valueless while under customs
control. Any cost herein incurred shall be borne
by the declarant;
(b) When goods are destroyed or
irrecoverably lost by accident or force
majeure, the remaining waste or scrap after
destruction, if taken into consumption, shall be
subject to the duties and taxes that would be
applicable on such waste or scrap if imported in
same state; and
(c) When there are shortages due to the nature
of the goods.
Q: Are these the only grounds for abatement
and refund?
A: Not really. There are other grounds for
abatement:
1. Sec. 905 – Damage incurred during the
voyage. As a rule, abatement due to
damage incurred during the voyage is
not allowed, unless otherwise provided
in CMTA. The succeeding sections
provides for such exceptions.
2. Sec. 906 – Missing Package;
3. Sec. 907 – Deficiency in Contents of
Packages;
4. Sec. 908 – Goods Lost or Destroyed
After Arrival;
5. Sec. 909. – Defective Goods; and,
6. Sec. 910. – Dead or Injured Animals.
7. Sect. 912. – Correction of Errors.
Q: What is the proceedure covering the claims
for refund of duties and taxes under CTMA?
A: Let’s see Sec. 913:
Section 913. Claims for Refund.— All claims
and application for refund of duties and taxes
shall be made in writing and filed with the
Bureau within twelve (12) months from the date
of payment of duties and taxes.
Let’s dissect.
Page 29 of 39
Q: Where should the claim for refund be filed?
A: It must e filed before the BOC.
Q: When should it be made, within 12 months
from the date of payment of duties and taxes.
Q: What if the BOC denies the claim for refund
or abatement?
A: The law says:
Sec. 913. xxx xxx xxx
(3rd paragraph) The importer may file an appeal
of a denial of a claim for refund or abatement,
whether it is a full or partial denial, with the
Commissioner within thirty (30) days from the
date of the receipt of the denial. The
Commissioner shall render a decision within
thirty (30) days from the receipt of all the
necessary documents supporting the
application. Within thirty (30) days from receipt
of the decision of the Commissioner, the case
may also be appealed to the CTA.
So, the importer may file an appeal of a denial of
a claim for refund or abatement within 30 days
from receipt of such denial. A full or partial
denial may be appealed to the COC.
The COC shall render a decision within 30 days
from receipt of all the necessary documents
supporting the application.
Within 30 days from receipt of the decision of
the COC, the case may be appealed to the CTA
through a petition for review.
Sec. 913. xxx xxx xxx
If as a result of the refund of duties, a
corresponding refund of internal revenue taxes
on the same importation becomes due, the
Bureau shall cause the refund of internal
revenue taxes in favor of the importer after
issuance of a certification from the
Commissioner of Internal Revenue, when
applicable.
xxx xxx
Notwithstanding the provisions in the preceding
paragraphs, the filing of claims for refund of
national internal revenue taxes shall be
governed by the provisions provided under the
NTRC of 1997, as amended.

ADMINISTRATIVE AND JUDICIAL
PROCEDURE
The taxpayer may request for an advanced
ruling. The advanced ruling may be in the form
of:
1. Classification ruling (Sec. 1100);
2. Valuation ruling (Sec. 1101); and,
3. Rules of origin Sec. 1102.
An application for an advance ruling shall cover
only one (1) product or item. It shall be filed at
least 90 days before importation or exportation
of the item, as the case may be (Sec. 1103,
CMTA).
Classification Ruling
Section 1100. Classification Ruling.— An
importer or exporter may file a written
application for an advance ruling on the tariff
classification of goods with the Tariff
Commission. The Commission shall render a
ruling within thirty (30) days from receipt of a
properly documented application.
When a declared tariff classification of goods,
not subject of a pending application for advance
ruling, is in dispute, the importer, exporter, or the
Bureau shall submit the matter to the
Commission for a ruling, without prejudice to the
application of Section 1106 of this Act on
“protest”: Provided, That such rulings of the
Commission on commodity classification shall
be binding upon the Bureau, unless the
Secretary of Finance shall rule otherwise.
Take note that classification rulings are filed
before the Tariff Commission.
Valuation Ruling
Section 1101. Valuation Ruling.— An importer
or exporter may file a written application for an
advance valuation ruling on the proper
application of a specific method on customs
valuation of specific goods as prescribed in Title
VII, Chapter 1 of this Act.
The application for a valuation ruling shall be
filed with the Commissioner who shall issue a
ruling within thirty (30) days from submission of
the application form and supporting documents
Page 30 of 39
as may be required by rules and regulations.
When the valuation method of goods not subject
of an application for advance valuation ruling or
the declared customs value is in dispute, the
matter shall be resolved in accordance with
Section 1106 of this Act on “protest”.
The application for a valuation ruling shall be
filed with the the BOC.
Rules of Origin
Section 1102. Ruling on the Rules of Origin.—
An importer or exporter may file a written
application for a ruling on whether the goods
qualify as originating under the rules of origin of
the applicable preferential trade agreement. The
application for an advance ruling on origin shall
be filed with the Commissioner who shall act on
the application within thirty (30) days from
receipt of the application and supporting
documents as may be required by rules and
regulations.
When the declared origin of the goods, not
subject of a request for advance ruling on origin,
is in dispute, the matter shall be resolved in
accordance with Section 1106 of this Act on
“protest”.
Appeals by Aggreived Party of Advanced
Ruling
Section 1104. Administrative and Judicial
Appeals.— An aggrieved party may, within thirty
(30) days from receipt of an adverse ruling or
decision, appeal the same to the CTA without
prejudice to the authority of the Secretary of
Finance to review decisions adverse to the
government in accordance with Sections 1127
and 1128 of this Act, as the case may be.
The advance ruling on the rules of origin shall be
filed at the BOC.
PROTEST
Section 1106. Protest.— When, a ruling or
decision of the District Collector or customs
officer involving goods with valuation, rules of
origin, and other customs issues is made,
except the fixing of fines in seizure cases, the
party adversely affected may appeal by way of
protest against such ruling or decision by
presenting to the Commissioner at the time

when payment of the amount claimed to be due
the government is made, or within fifteen (15)
days thereafter, a written protest setting forth the
objection to the ruling or decision in question
and the reasons therefore.
Subject to the approval of the Secretary of
Finance, the Commissioner shall provide such
rules and regulations as to the requirement for
payment or nonpayment of the disputed amount
and in case of nonpayment, the release of the
importation under protest upon posting of
sufficient security.
Q: When can the taxpayer protest?
A: The taxpayer may protest a ruling or decision
of the district collector or customs officer
involving goods for:
1. Valuation,
2. Rules of origin, and
3. Other customs issues
Protest is not available in fixing of fines in
seizure cases.
Q: When should the protest be filed?
A: The protest shall be filed with the
Commissioner (District Collector) at the time
when payment of the amount claimed to be due
to the government is made, or within 15 days
thereafter.
From the provision, it is required that:
1. There is a payment of duties and taxes
under protest; and,
2. The protest must be filed at the time of
payment or within 15 days after
payment.
The written protest must set forth the objection
to the ruling or decision in questions and there
reasons therefor.
Protest is an exclusive remedy in protestable
cases. This is clear under Sec. 1107 of CMTA:
Section 1107. Protest Exclusive Remedy in
Protestable Case.— In all cases subject to
protest, the interested party who desires to have
the action of the District Collector reviewed, shall
file a protest as provided in Section 1106 of this
Act, otherwise the action of the District Collector
shall be final and conclusive.
Q: What if the decision of the district collector is
adverse?
Page 31 of 39
A: Then the procedure in appeal under Sec. 114
in relation to Sec. 1126 should be followed:
Section 114. Right of Appeal, Forms and
Ground.— Any party adversely affected by a
decision or omission of the Bureau pertaining to
an importation, exportation, or any other legal
claim shall have the right to appeal within fifteen
(15) days from receipt of the questioned
decision or order.
An appeal in writing shall be filed within the
period prescribed in this Act or by regulation and
shall specify the grounds thereof.
The Bureau may allow a reasonable time for the
submission of supporting evidence to tbe
appeal.
Section 1126. Appeal to the Commissioner.—
In forfeiture cases, the person aggrieved by the
decision of a District Collector may, within fifteen
(15) days or five (5) days in case of perishable
goods, from receipt of the decision, file a written
notice of appeal, together with the required
appeal fee to the District Collector, furnishing a
copy to the Commissioner. The District Collector
shall immediately transmit all the records of the
proceedings to the Commissioner, who shall
review and decide on the appeal within thirty
(30) days from receipt of the records, or fifteen
(15) days in the case of perishable goods:
Provided, That if within thirty (30) days, no
dedsion is rendered, the decision of the District
Collector under appeal shall be deemed
affirmed. An appeal filed beyond the period
herein prescribed shall be dismissed.
Appeals to protest cases shall be governed
by Section 114 of this Act.
The decision of the Commissioner may be
served through the recognized modes of service
under existing law.
In other words, after the protest with the COC, if
the decision is adverse, the taxpayer has 15
days from receipt of the decision within which to
file an appeal with the CTA. The CTA has
exclusive appellate jurisdiction over the
decisions of the COC in cases involving liability
for customs duties, fees or other money
charges, seizure, detention or release of
property affected, fines, forfeitures or other
penalties in relation thereto, or other matters

arising under the Customs Law or other laws
administered by the Bureau of Customs.
ALERT ORDERS
Q: What are alert orders?
A: Section 1111:
Section 1111. Alert Orders.— Alert orders are
written orders issued by customs officers as
authorized by the Commissioner on the basis of
derogatory information regarding possible
noncompliance with this Act.
Q: What is a “derogatory information”?
A: These are violations of CMTA that are
possibly committed by the importer or exporter.
But take note that derogatory information, to be
within the meaning of an alert order, should
have some sort of basis and must be specific. It
must not merely be based on general
allegations.
Derogatory information shall indicate the
violations and other necessary specifics thereof.
For this purpose, the following shall not be
considered derogatory information:
(a) General allegations of misclassification
without providing the appropriate tariff heading
and duty of the shipment to be alerted;
(b) General allegations of misclassification
without providing the appropriate tariff heading
and duty of the shipment to be alerted;
(c) General allegations of over-quantity without
indicating the source of information supporting
the allegation;
(d) General allegations of misdeclaration in the
entry without indicating the suspected actual
contents thereof; and
(e) General allegations of importations contrary
to law without indicating the specific law or rule
to be violated.
No alert order shall be issued on account of
allegations of undervaluation unless said
undervaluation is caused by the submission to
customs of forged or spurious invoice or other
commercial documents.
Q: When is an alert order issued?
Page 32 of 39
A: The law says:
An alert order may be issued only after
lodgement of the goods declaration and prior
to the release of goods from customs custody.
Under no circumstances shall the suspension of
the processing of goods declaration be allowed
except through an alert order issued by an
authorized customs officer.
It’s after lodgement of the goods declaration and
prior to the release of such goods. An alert order
may suspend the processing the goods
declaration so long as the alert order is issued
by an authorized customs officer.
The costs of the physical inspection shall be
borne by the Bureau: Provided, That such cost
shall be reimbursed by the owner prior to the
release of the goods if the physical inspection
results in the assessment of additional duties or
taxes or the issuance of a warrant of seizure.
The Commissioner shall be notified of the
recommendation by the alerting officer within
twenty-four (24) hours from the issuance of the
alert order. Alert orders shall be dated and
assigned a unique reference number in series
which shall be the basis for reporting to and
monitoring by the Commissioner and the
Secretary of Finance.
The Bureau shall create a central clearing house
for alert orders and shall submit reports quarterly
on the status thereof.
Section 1112. Alert Orders on Perishable
Goods.— When the subject of the alert order are
perishable goods, the Bureau shall attach to the
recommendation a certificate stating that the
goods are perishable.
SEIZURE AND FORFEITURE
Q: What are the properties subject to seizure
and forfeiture?
A: Sec. 1113:
Section 1113. Property Subject to Seizure and
Forfeiture.— Property that shall be subject to
seizure and forfeiture include:
(a) Any vehicle, vessel or aircraft, including
cargo, which shall be used unlawfully in the
importation or exportation of goods or in

conveying or transporting smuggled goods in
commercial quantities into or from any Philippine
port or place. The mere carrying or holding on
board of smuggled goods in commercial
quantities shall subject such vehicle, vessel,
aircraft, or any other craft to forfeiture: Provided,
That the vehicle, vessel, aircraft or any other
craft is not used as a common carrier which has
been chartered or leased for purposes of
conveying or transporting persons or cargo;
(b) Any vessel engaging in the coastwise trade
which shaft have on board goods of foreign
growth, produce, or manufacture in excess of
the amount necessary for sea stores, without
such goods having been properly entered or
legally imported;
(c) Any vessel or aircraft into which shall be
transferred cargo unloaded contrary to law prior
to the arrival of the importing vessel or aircraft at
the port of destination;
(d) Any part of the cargo, stores, or supplies of a
vessel or aircraft arriving from a foreign port
which is unloaded before arrival at the vessel’s
or aircraft’s port of destination and without
authority from the customs officer; but such
cargo, ship, or aircraft stores and supplies shall
not be forfeited if such unloading was due to
accident, stress of weather, or other necessity
and is subsequently approved by the District
Collector;
(e) Goods which are fraudulently concealed in or
removed contrary to law from any public or
private warehouse, container yard, or container
freight station under customs supervision;
(f) Goods, the importation or exportation of
which are effected or attempted contrary to law,
or any goods of prohibited importation or
exportation, and all other goods which, in the
opinion of the District Collector, have been used,
are or were entered to be used as instruments in
the importation or the exportation of the former;
(g) Unmanifested goods found on any vessel or
aircraft if manifest therefor is required;
(h) Sea stores or aircraft stores adjudged by the
District Collector to be excessive, when the
duties and taxes assessed by the District
Collector thereon are not paid or secured
forthwith upon assessment of the same;
(i) Any package of imported goods which is
Page 33 of 39
found upon examination to contain goods not
specified in the invoice or goods declaration
including all other packages purportedly
containing imported goods similar to those
declared in the invoice or goods declaration to
be the contents of the misdeclared package;
(j) Boxes, cases, trunks, envelopes, and other
containers of whatever character used as
receptacle or as device to conceal goods which
are subject to forfeiture under this Act or which
are so designed as to conceal the character of
such goods;
(k) Any conveyance actually used for the
transport of goods subject to forfeiture under tbis
Act, with its equipage or trappings, and any
vehicle similarly used, together with its
equipment and appurtenances. The mere
conveyance of smuggled goods by such
transport vehicle shall be sufficient cause for the
outright seizure and confiscation of such
transport vehicle but the forfeiture shall not be
effected if it is established that the owner of the
means of conveyance used as aforesaid, is
engaged as common carrier and not chartered
or leased, or that the agent in charge thereof at
the time, has no knowledge of the unlawful act;
and
(l) Goods sought to be imported or exported:
(1) Without going through a customs
office, whether the act was
consummated, frustrated, or
attempted;
(2) Found in the baggage of a person
arriving from abroad and undeclared
by such person;
(3) Through a false declaration or affidavit
executed by the owner, importer,
exporter, or consignee concerning the
importation of such goods;
(4) On the strength of a false invoice or
other document executed by the
owner, importer, exporter, or
consignee concerning the importation
or exportation of such goods; or
(5) Through any other practice or device
contrary to law by means of which
such goods entered through a customs
office to the prejudice of the

government.
Now, vehicles, vessels, or aircraft shall not be
effected if it is established that the owner thereof
or the agent in charge of the means of
conveyance has no knowledge of or
participation of the unlawful act.
But the law provides for prima facie presumption
against the vehicle, vessel, or aircraft under the
following circumstances:
1. If the conveyance has been used for
smuggling before;
2. If the owner is not in the business for
which the conveyance is generally used;
and,
3. If the owner is not in a financial position
to own such conveyance.
Forfeiture shall be effected only when and while
the goods are in the custody or within the
jurisdiction of customs officers, or in the
possession or custody of or subject to the
control of the importer, exporter, original owner,
consignee, agent of another person effecting the
importation, entry or exportation in question, or
in the possession or custody of or subject to the
control of persons who shall receive, conceal,
buy, sell, or transport the same, or aid in any of
such acts, with knowledge that the goods were
imported, or were the subject of an attempt at
importation or exportation contrary to law (Sec.
1115, CMTA).
Q: When should be the order of release or
warrant of seizure be issued?
A: Sec. 1116.
Section 1116. Seizure or Release of Goods.—
The District Collector shall issue an order of
release or a warrant of seizure within five (5)
days, or two (2) days in case of perishable
goods, upon the recommendation of the alerting
officer or any other customs officer. The District
Collector shall immediately make a report of
such seizure or release to the Commissioner.
Q: Who has the authority to issue a warrant of
seizure?
A: Sec. 1117.
Section 1117. Warrant of Seizure or Order of
Release.— The District Collector shall have the
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authority to issue a warrant of seizure of the
goods upon determination of the existence of
probable cause and in case of nonexistence
thereof, the issuance of order of release. In case
the District Collector issued an order of release,
the District Collector shall immediately transmit
all the records to the Commissioner who shall
automatically review within forty-eight (48)
hours, or within twenty-four (24) hours in case of
perishable goods. When no decision is made by
the Commissioner within the prescribed period,
the imported goods shall be deemed released.
The lifting of the alert order shall he issued by
the District Collector only upon the affirmation of
the decision of the District Collector by the
Commissioner, or after the lapse of the period of
review by the Commissioner, whichever is
earlier.
The District Collector has the authority.
Q: What is there requirement?
A: There must be a determination of the
existence of probable cause. If there is none,
order of release shall be issued.
Q: What happens if the District Collector issues
an order of release?
A: There will be an automatic review by the
COC. That’s why the DC should immediately
transmit the records to the COC within 48 hours
(or 24 hours in case of perishable goods. When
COC does not issue any ruling with the
prescribed period (30 days or 10 days if
perishable), the provisions says “deemed
released.”
Perishable goods may also be solved during
forfeiture proceedings under Section 1118.
Then you have Service of Warrant of Seizure in
Sec. 1119:
Section 1119. Service of Warrant of Seizure.—
The District Collector shall cause the service of
warrant of seizure to the owner or importer of
the goods or the authorized representative
thereof. The owner or importer shall be given, an
opportunity to be heard during the forfeiture
proceedings.
For the purpose of serving the warrant, the
importer, consignee, or person holding the bill of
lading or airway bill shall be deemed the “owner”
of the goods. For the same purpose, “authorized

representative” shall include any agent of the
owner and if the owner or the agent is unknown,
any person having possession of the goods at
the time of the seizure.
Service of warrant to an unknown owner shall be
effected by posting the warrant for fifteen (15)
days in a public place at the concerned district,
and by electronic or printed publication.
Q: What if the owner is unknown?
A: Section 1121:
Section 1121. Proceedings in Case of Property
Belonging to Unknown Parties.— If, within
fifteen (15) days after service of warrant, no
owner or agent can he found or appears before
the District Collector, the seized goods shall be
forfeited ipso facto in favor of the government to
be disposed of in accordance with this Act.
Q: Who has the burden of proof in forfeiture
proceedings?
A: Sec. 1123:
Section 1123. Burden of Proof in Forfeiture
Proceedings.— In all proceedings for the
forfeiture of any vehicle, vessel, aircraft, or
goods under this Act, the burden of proof shall
be borne by the claimant.
Q: Can there be settlement pending seizure
case?
A: Yes, by payment of the fine or redemption of
the forfeited goods. under Section 1124. Take
note though that in the following cases,
settlement of any seizure case is not allowed:
1. There is fraud involved (discrepancy of
taxes and duties to be paid between
what was determined and what is
declared exceeds 30%);
2. Where the importation is prohibited;
3. Release of goods is contrary to law.
Section 1124. Settlement of Pending Seizure
Case by Payment of Fine or Redemption of
Forfeited Goods.— Subject to the approval of
the Commissioner, the District Collector may
allow the settlement by payment of fine or the
redemption of forfeited goods, during the course
of the forfeiture proceeding. However, the
Commissioner may accept the settlement by
redemption of any forfeiture case on appeal. No
settlement by payment of fine shall be allowed
when there is fraud or when the discrepancy in
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duties and taxes to be paid between what is
determined and what is declared amounts to
more than thirty percent (30%).
In case of settlement by payment of fine, the
owner, importer, exporter, or consignee or agent
shall offer to pay a fine equivalent to thirty
percent (30%) of the landed cost of the seized
goods. In case of settlement by redemption, the
owner, importer, exporter, or consignee or agent
shall offer to pay the redeemed value equivalent
to one hundred percent (100%) of the landed
cost.
Upon payment of the fine or payment of the
redeemed value, the goods shall be released
and all liabilities which may attach to the goods
shall be discharged without prejudice to the filing
of administrative or criminal case.
Settlement of any seizure case by payment of
the fine or redemption of forfeited goods shall
not be allowed when there is fraud, or where the
importation is prohibited or the release of the
goods is contrary to law.
Q: When will a decision in forfeiture case be
rendered?
A: The collector shall issue an Order for hearing
within 15 days (5 days perishable) from
issuance of warrant.
The DC shall render a decision within 30 days
upon termination of the hearing (10 days in case
of perishable goods).
The decision shall include a declaration of
forfeiture, the imposition of a fine, or such other
action that may be proper.
APPEAL IN FORFEITURE CASES
The procedure in appeal in forfeiture cases is
found in Sec. 1126:
Section 1126. Appeal to the Commissioner.—
In forfeiture cases, the person aggrieved by the
decision of a District Collector may, within fifteen
(15) days or five (5) days in case of perishable
goods, from receipt of the decision, file a written
notice of appeal, together with the required
appeal fee to the District Collector, furnishing a
copy to the Commissioner. The District Collector
shall immediately transmit all the records of the
proceedings to the Commissioner, who shall
review and decide on the appeal within thirty
(30) days from receipt of the records, or fifteen

(15) days in the case of perishable goods:
Provided, That if within thirty (30) days, no
dedsionis rendered, the decision of the District
Collector under appeal shall be deemed
affirmed. An appeal filed beyond the period
herein prescribed shall be dismissed.
Appeals to protest cases shall be governed by
Section 114 of this Act.
The decision of the Commissioner may be
served through the recognized modes of service
under existing law.
Automatic Review
There are also cases of automatic review in
forfeiture cases:
Auto-review by Commissioner from any
Decision of the District Collector
Section 1127. Automatic Review in Forfeiture
Cases.— The Commissioner shall automatically
review any decision by the District Collector
adverse to the government. The entire records
of the case shall be elevated within five (5) days
from the promulgation of the decision.
The Commissioner shall decide on the
automatic review within thirty (30) days, or within
ten (10) days in the case of perishable goods,
from receipt of the records.
Q: Now, what happens if the COC does not
decide within 30 days or in case the decision is
adverse to the government?
A: Under the same Section 1127, there will be
an auto-elevation for review to the SOF:
When no decision is rendered within the
prescribed period or when a decision adverse
to the government is rendered by the
Commissioner involving goods with FOB or
FCA value of ten million pesos
(₱10,000,000.00) or more, the records of the
decision of the Commissioner, or of the District
Collector under review, as the case may be,
shall be automatically elevated within five (5)
days for review by the Secretary of Finance.
The decision issued by the Secretary of
Finance, whether or not a decision was
rendered by the Commissioner within thirty (30)
days, or within ten (10) days in the case of
perishable goods, from receipt of the records,
shall be final upon the Bureau.
Page 36 of 39
You also have the auto-review by the SOF in
other cases under Section 1128:
Section 1128. Automatic Review by the
Secretary of Finance in Other Cases.— In cases
not involving protest or forfeiture, the
Commissioner shall automatically review any
decision by the District Collector that is adverse
to the government. The records of the case shall
be elevated to the Commissioner within five (5)
days from the promulgation of the decision.
The Commissioner shall decide on the
automatic review within thirty (30) days from
receipt of the records, or within ten (10) days in
the case of perishable goods. When no
decision is rendered within the prescribed
period or when any decision rendered by the
Commissioner is adverse to the government,
the records of the case under review shall be
automatically elevated within five (5) days for the
review of the Secretary of Finance.
The decision issued by the Secretary of
Finance, whether or not a decision was
rendered by the Commissioner within thirty (30)
days from receipt of the records, or within ten
(10) days in the case of perishable goods, shall
be final upon the Bureau.
ABANDONMENT
Now, there this concept of abandonment:
Abandonment in customs practice is the
renunciation by an importer of all his interests
and property rights in the imported article.
There are 2 kinds of abandonment:
1. Express abandonment;
2. Implied abandonment.
Section 1129. Abandonment, Kinds and Effects
of.— Imported goods are deemed abandoned
under any of the following circumstances;
(a) When the owner, importer, or consignee of
the imported goods expressly signifies in writing
to the District Collector the intention to abandon
the same; or
(b) When the owner, importer, consignee, or
interested party after due notice, falls to file the
goods declaration within the prescribed period in

Section 407 of this Act; Provided, That the term
goods declaration shall include provisional or
incomplete goods declaration deemed valid by
the Bureau as provided in Section 403 of this
Act. For this purpose, it is the duty of the District
Collector to post a list of all packages
discharged and their consignees, whether
electronically or physically in the District Office,
or send a notice to the consignee within five (5)
days from the date of discharge; or
(c) Having filed such goods declaration, the
owner, importer, consignee or interested party
after due notice, fails to pay the assessed
duties, taxes and other charges thereon, or, if
the regulated goods failed to comply with
Section 117 of this Act, within fifteen (15) days
from the date of final assessment: Provided,
That if such regulated goods are subject of an
alert order and the assessed duties, taxes and
other charges thereof are not paid within fifteen
(15) days from notification by the Bureau of the
resolution of the alert order, the same shall also
be deemed abandoned; or
(d) Having paid the assessed duties, taxes and
other charges, the owner, importer or consignee
or interested party after due notice, fails to claim
the goods within thirty (30) days from payment.
For this purpose, the arrastre or warehouse
operator shall report the unclaimed goods to the
District Collector for disposition pursuant to the
provisions of this Act; or
(e) When the owner or importer fails to claim
goods in customs bonded warehouses within the
prescribed period.
The due notice requirement under this section
may be provided by the Bureau through
electronic notice or personal service; Provided,
That for non-regular importers, notification shall
be by registered mail or personal service. For
tins purpose, the accreditation of importers,
exporters, and other third parties shall indude
provision for mandatory receipt of electronic
notices.
The first case is an express abandonment.
There is an actual renunciation of the right over
the imported goods. The rest of the cases are
implied abandonment.
Q: What is the treatment of abandoned goods?
A: Section 1130:
Section 1130. Treatment and Disposition of
Page 37 of 39
Abandoned Goods.— Expressly abandoned
goods under paragraph (a) of Section 1129 of
this Act shall ipso facto be deemed the property
of the government and shall be disposed of in
accordance with the provisions of this Act.
If the Bureau has not disposed of the
abandoned goods, theowner or importer of
goods impliedly abandoned may, at any time
within thirty (30) days after the lapse of the
prescribed period to file the declaration, reclaim
the goods provided that all legal requirements
have been complied with and the corresponding
duties, taxes and other charges, without
prejudice to charges and fees due to the port or
terminal operator, as well as expenses incurred
have been paid before the release of the goods
from customs custody.
When the Bureau sells goods which have been
impliedly abandoned, although no offense has
been discovered, the proceeds of the sale, after
deduction of any duty and tax and all other
charges and expenses incurred as provided in
Section 1143 of this Act, shall be turned over to
those persons entitled to receive them or, when
this is not possible, held at their disposal for a
specified period. After the lapse of the specified
period, the balance shall be transferred to the
forfeiture fund as provided in Section 1151 of
this Act.
CIVIL REMEDIES FOR COLLECTION OF
DUTIES AND TAXES
Section 1132. Remedies for the Collection of
Duties, Taxes, Fines, Surcharges, Interests, and
Other Charges.— The civil remedies for the
collection of import duties, taxes, fees, or
charges resulting from the conduct of a post
clearance audit shall be obtained by:
(a) Distraint of goods, chattels, or effects, and
other personal property of whatever character,
including stocks and other securities, debts,
credits, bank accounts, and interest in and rights
to personal property, and by levy upon real
property and interest in rights to real property;
and
(b) Civil or criminal action.
Either or both of these remedies may be
pursued at the discretion of the Bureau;
Provided, That the remedies of distraint and levy

shall not be allowed when the amount of duties
and taxes involved is not more than ten
thousand pesos (₱10,000.00).
The Bureau shall advance the amounts needed
to defray costs of collection by means of civil or
criminal action, including the preservation or
transportation of personal property distrained
and the advertisement and sale thereof as well
as of real property and improvements thereon.
Section 1133. Constructive Distraint of the
Property.— To safeguard the interest of the
government, the Commissioner may place under
constructive distraint the property of a delinquent
importer who, in the opinion of the
Commissioner, is retiring from any business
subject to duty and tax, or is intending to leave
the Philippines, or to remove the property
therefrom, or to hide or conceal the property, or
to perform any act tending to obstruct the
proceedings for collecting the duty and tax due,
or which may be due.
The constructive distraint of personal property
shall be effected by requiring the importer or any
person in possession or control of such property
to sign a receipt covering the property, to
obligate to preserve the distrained property on
the state and condition at the time of the
government's seizure of the same, and not to
dispose of the same in any manner whatsoever,
without the express authority of the
Commissioner.
In case the importer or the person in possession
and control of the property sought to be placed
under constructive distraint refuses or fails to
sign the receipt herein referred to, the customs
officer effecting the constructive distraint shall
proceed to prepare a list of such property and, in
the presence of two (2) witnesses, leave a copy
thereof in the premises where the property
distrained is located, after which the said
property shall be deemed to have been placed
under constructive distraint.
Section 1134. Summary Remedies.—
(A) Distraint of Personal Property.— Upon
failure of the person owing any delinquent duty,
tax and other charges to pay at the time
required, the Commissioner shall seize and
distraint the goods, chattels or effects, and the
personal property, including stocks and other
securities, debts, credits, hank accounts, and
interests in and rights to personal property of
such persons, in sufficient quantity to satisfy the
duty, tax or other charge and the expenses of
Page 38 of 39
the distraint and the cost of the subsequent sale.
The officer serving the warrant of distraint shall
make or cause to be made an account of the
goods, chattels, effects, or other personal
property distrained, a copy of which, signed by
the said officer, shall he left either with the
owner or person from whose possession such
goods, chattels, or effects or other personal
property were taken, or at the dwelling or other
place of business of such person and with
someone of suitable age and discretion, to
which list shall be added a statement of the sum
demanded and note of the time and place of
sale.
Stocks and other securities shall be distrained
by serving a copy of the warrant of distraint upon
the importer and upon the president, manager,
treasurer, or other responsible officer of the
corporation, company or association, which
issued the said stocks or securities.
Debts and credits shall be distrained by leaving
with the person owing the debts or having in
his/her possession or under his/her control such
credits, or with his/her agent, a copy of the
warrant of distraint. The warrant of distraint shall
be sufficient authority to the person owing the
debts or having in his possession or under his
control any credits belonging to the importer to
pay to the Commissioner the amount of such
debts of credits.
Bank accounts shall be garnished by serving a
warrant of garnishment upon the importer and
upon the president, manager, treasurer, or other
responsible officer of the bank Upon the receipt
of the warrant of garnishment, the bank shall
turn over to the Commissioner so much of the
bank accounts as may be sufficient to satisfy the
claim of the government.
A report on the distraint shall, within ten (10)
days from receipt of the warrant, be submitted
by the Commissioner to the Secretary of
Finance: Provided, That the Commissioner shall
have the power to lift such order of distraint
subject to the rules and regulations promulgated
pursuant to this Act.
(B) Levy on Real Property.— After the expiration
of the period within which to pay the duty, tax
and other charges as prescribed in this section,
real property may be levied upon, before,
simultaneously, or after the distraint of personal
property belonging to the importer. To this end,

the Commissioner or the duly authorized
representative shall prepare a duly
authenticated certificate showing the name of
the importer and the amounts of the duty and tax
and penalty due. The certificate shall operate
with the force of a legal execution throughout the
Philippines.
The levy shall be effected by writing upon the
certificate a description of the property on which
levy is made. At the same time, written notice of
the levy shall be mailed to or served upon the
register of deeds of the province or city where
the property is located and upon the importer, or
if the latter is not in the Philippines, upon the
agent or the manager of the business from
which the liability arose, or if there be none, to
the occupant of the property in question.
In case the warrant of levy on real property is
not issued before or simultaneously with the
warrant of distraint on personal property, and the
personal property of the importer is not sufficient
to satisfy the duty and tax due, the
Commissioner or a duly authorized
representative shall, within thirty (30) days after
execution of the distraint, proceed with the levy
on the real property of the importer.
Within ten (10) days after receipt of the warrant,
a report on any levy shall be submitted by the
levying officer to the Commissioner; Provided,
That the Commissioner may lift such warrants of
levy issued, subject to the rules and regulations
promulgated pursuant to this Act.
JUDICIAL PROCEEDINGS
Section 1135. Supervision and Control over
Criminal and Civil Proceedings.— Civil and
criminal actions and proceedings instituted on
behalf of the Government under the authority of
this Act or other laws enforced by the Bureau
shall be brought in the name of the government
of the Philippines and shall be prosecuted and
handled by the Bureau with the assistance of the
Department of Justice (DOJ): Provided, That the
determination of the existence of probable cause
and the subsequent filing of any criminal or civil
case with the proper court against violators of
this Act shall exclusively belong to the DOJ:
Provided, However, That no civil or criminal
action for the recovery of duties or the
enforcement of any fine, penalty or forfeiture
under this Act shall be filed in court without the
Page 39 of 39
approval of the Commissioner.
Section 1136. Review by the CTA.— Unless
otherwise provided in this Act or by any other
law, the party aggrieved by the ruling or
decisions of the Commissioner may appeal to
the CTA, in the manner and within the period
prescribed by law and regulations. Decisions of
the Secretary of Finance when required by this
Act, may likewise be appealed to the CTA.
Unless an appeal is made to the CTA in the
manner and within the period prescribed by law
and regulations, the ruling or decision of the
Commissioner or the Secretary of Finance shall
be final and executory.
Section 1137. Exclusive Jurisdiction of the
Bureau.— Jurisdiction over imported goods and
goods for exportation shall be exclusive to the
Bureau, or the Secretary of Finance, when
under review by the latter, subject to the
proceedings described in this title.
Except for the CTA, no court may issue any
order or decision until all the remedies for
administrative appeal have been exhausted.
Section 1138. Fraud Investigation and
Prosecution.— No criminal case for violation of
this title shall be instituted without the approval
of the Commissioner pursuant to the provisions
of this Act.
The Bureau shall have the power to investigate
andinstitute smuggling cases committed within
its jurisdiction; Provided, That in case of inquest,
the same may be instituted by the apprehending
customs officer.